Buy home we can afford or borrow money for forever home

[PeachOP]

Hi everyone, I’m looking for some advice. My partner and I are currently renting, but we’re now looking to buy our first home.
We’ve worked hard to save a 10% deposit, and during that time, we’ve had one child and are now expecting another. Initially, we set a budget, but after viewing houses in that range, we feel they’re a bit small. While they’re much better than where we live now, I worry they won’t suit us as our children grow, meaning we’d need to move or extend in a few years.
If we stretch our budget, we could buy a forever home, but it would mean borrowing from my parents and paying them back within a year. This is achievable but would mean another year of tight finances, and I’m honestly tired of scraping by after years of saving.
Would you go for the bigger house and tough it out for another year, or buy the smaller house and plan to move in 5 years

Bigger house

Any chance your parents would let you pay back over a longer period?

Otherwise I would go for what you can afford and enjoy life. You can extend or move in a few years.

You are pregnant, can you afford this during your maternity leave. Would it affect how soon you would go back to work.

How tight would finances be? IE if you moved into the bigger house and found out that actually the boiler didn't work or the roof leaked would that put you in severe financial difficulty?

Or is there a middle ground price-wise? To get a better house that's not necessarily the dream house?

I assume you have maxed out your mortgage affordability to buy the smaller house? Maxing out affordability would worry me a bit in the first place tbh, but I appreciate that most people don't really have an option. Not sure I'd want to add an additional informal loan on top tbh

Bigger house.

Yep sorry I was just about to come back on to add this part. Stretching the budget will also mean I will have to cut my maternity leave short

Or actually, can you afford something smaller now but with the potential to extend in a few years once you've saved?

Surely the price makes a difference?
10% of 180k or 10% of 380k
How much you earn, job progression and security .
Would your borrowing from family impact their life?
All things that I would consider

I would buy the smaller house that you can afford, it sounds like you need a bit of breathing space and and with a baby on the way you don't need the stress of worrying about money. You can go bigger later on if you still want to, but you might find the house you can afford is the perfect one for your needs.

Does the small house have 3 bedrooms?

I would be inclined to go for the smaller one if it's a stretch to afford the forever home. It will be fine for quite a few years. You already say you will need to cut short your maternity leave - how do you feel about this? Personally I wouldn't want to cut back on days out etc when the children are young.

I wouldn’t go bigger at the moment, it’s the wrong time if you need to cut maternity short - you can’t get that back, but you can get a bigger house later.
Also don’t underestimate how much of a buffer you need for any repairs to the new house - there is always something!

I hope you are ring fencing your parents money incase things go pear shaped.
As a parent to adults I'd give money to my kids for a bigger home if the one they were in wasn't suitable.

I lived in a tiny home when my children were young. I loved it and the only reason we moved was for another bedroom for my youngest. If it had had 3 bedrooms already I don't know if we would have bothered.

Don't forget that if your parents loan the money, your repayments will be taken into account for affordability of the mortgage. Some lenders may not like the arrangement at all.

Smaller house for more security financially.

Let’s say you go for the bigger house, how would you cope if interest rates rose again (e.g. +3/4%)? Not the most likely outcome, but equally, if Trump were to start a global trade war with his tariffs when he comes in next month, wouldn’t be a huge surprise

Can you say what you mean by smaller? Is it less bedrooms or smaller room sizes?

I would go for smaller house. Less stress when you are about to expand your family. Plus there will be factors in a forever home that you probably haven’t thought about yet, like school zones. Take the pressure off and look for the forever home once you are through the expensive years of childcare. Also don’t forget that bigger homes are more expensive to run.

House buying is so much more expensive and time consuming than you ever really plan for. There are often unexpected jobs, trade prices have gone up , so tradies prices have gone up, trying to find tradies and then their timescales are crazy.

Smaller houses are two bedroom, me and my partner will have the smaller bedroom, which is basically a box room in all the homes we have seen and give the bigger room to our children to share. Bigger houses are around 100k more but three bedrooms and just proper family homes in my opinion. But I think everyone is right it is smarter to go for the small one for now. Ah! A girl can dream!

You're not really going to fit into a 2 bed. What are the prices we're talking about? House prices and monthly payments?

The money from your parents will need to be declared as a non repayable gift for the purposes of money laundering and borrowing.

How many children do you have?
Age difference? Have I missed that you say pregnant now & giving the bigger room to the children. ( Thinking bedrooms) Are you set on a particular area for school nursery jobs ?

We brought a 2 bed with 1 child and now we've got our second need to move.

Still can't really afford a 3 bed so it's possibly going back to renting or relocating area as can't find a place to buy in our budget where we want to be due to unforseen logistics of family.

Also £20k or so in moving costs

Imho stretch for it, a tight year now is ok rather than a tight year with nursery fees, two kids activities etc.

Space is worth it.

I'd go for your forever home. Make that big step now rather than later.

If I could do over buying my first home, it would not be the 2 bed mid terrace that was in budget. We would have stretched to the 3 bed or even pushed to a 4 to have our long term home.

Nearly 2 decades on, moving from our starter home 10 years ago with massive negative equity into a rented home big enough and we are just about in a position to be thinking about buying again.