Would you stretch yourselves for the perfect house?

[overthinkersanonnymus]

I have found a beautiful house on a very sort after street and I'm so torn on what to do. I put a really cheeky offer in (30k below asking!) and as expected, was knocked back. She won't budge from full asking.

My current house is fine, 3 beds, 2 bathrooms, drive, decent sized garden etc but this one is a real upgrade. It would mean doubling out mortgage 🫣

We don't have children (unexplained infertility) so it could still happen, although after 2 years of trying, I doubt it. Not with out help anyway.

Would you stretch yourself in order to get the right house?

100% agree.

The best thing me and my DH did was buy a house that only needs one wage to pay for it. I am 44 and will be mortgage free by the time I am 50. We have been able to put money into extending and decorating and making our house lovely. Plus we still get to have holidays and meals out etc. and our household income is very modest by MN standards at least !

Speaking as someone who grew up poor - nothing beats financial security.

Stretch is okay if you have some money left that you can save for the renos or holidays etc! Obviously if you have no money left at the end of the month it’s not a good idea.

I think it depends what it is about the next house that you think is SO much better.

If it is detached - that can be worth a lot, to a lot of people.
Something like a view over a beach or across to mountains etc - again, that might make it worth it, if you are talking about living there for the next 40 years.

But, that seems like a big jump if it is "just" another bedroom, when that isn't something your family need.

Against that, I agree with pp who said stretching yourself whilst you are young, is a great investment.

Nope

Definitely. We stretched ourselves to the very maximum possible when we bought our previous house and never regretted it. This was back in the 1980s when interest rates were sky high. our lender's rate went up to 18% between exchange and completion, and although it came back down to 16% quite quickly, the interest rate was in double figures for as long as I can remember. Our monthly mortgage repayments were around 70% of our combined net income so it was a real struggle, and it took a long time for us to do the work that was needed on the house, but things got easier after a couple of years as our earnings increased. It was definitely worth it for us.

No. Definitely not.
We had a mortgage for years. It was a millstone. We downsized and moved location in the end to be mortgage free. It's the best feeling ever.
We couldn't be here if we hadn't have had the mortgages and built the equity, but knowing you don't shoulder that burden anymore is so liberating.

Just not comparable.
Your home value will have rocketed and COL was completely different. There was no energy crisis.

Op we bought 5 years ago. We could have gone to 900k or 1m mortgage.
(You can work back our fairly healthy salaries at the time)
We went for 600k mortgage to give ourselves breathing room.
Property has increased by maybe 150k more like 100k since then

Our outgoing have increased radically as like you we wanted kids. Childcare is astronomical. In yr 1 our food was 100pm and bills were 400.
We now pay 600 for food and 1k for bills as well as pay over 3.5k per month for child care.
If our mortgage was 3.8k? instead of 2.3k and we had stretched ourselves when buying we would be very financially uncomfortable now and for foreseeable future despite pay rises.

Really OP, I wouldn’t. If you needed the space, then fair enough, but at the moment you don’t. So I’m not sure why you would actively choose to put yourselves in a more vulnerable position for the sake of a bigger house. Remember that while it seems great in your head now, the novelty will wear off, and you will be left with a massive mortgage and as a pp implied, possibly negative equity too due to current market forces so you’ll be trapped. The way the market is I wouldn’t be upsizing or FTBing at all (unless essential) for the next year or so but I am admittedly fairly risk averse and if this isn’t essential or something you KNOW you will be happy to commit to for the next decade at least I just wouldn’t bother.

We’re mortgage-free and I can’t tell you how liberating it is. It allows me to work pt and for us to actively save more for retirement.

I wouldn’t in this scenario - other costs of living and running a house are still high and we are in an uncertain economy right now.

I would stay put, enjoy life and save money for a future move when things are better

We just have. Big stretch to get our dream house, that’s itself is a renovation project.

However we feel now is the time to do it. We are mid-40s, have been together since we were 20, travelled a lot (took a career break and travelled for a year at one point), our kids are 10 & 12 so we’ve lost the second mortgage known as childcare and we spend a lot of time at home now, both also work from home. We opted to stay in our small “starter” home while friends were moving up the property ladder as at that point we valued having disposable income and not feeling stretched. We had a lot of fun with holidays, meals out, theatre etc. Now we just want to hunker down in the countryside with a bit of land. I think the question of whether to stretch is what you want day to day life to look like. For us it’s the right time which reduces the scare factor. Only you know if it’s your right time!

@LivingLaVidaBabyShower It might have been a long time ago, but it’s still the same principle - house prices continue to rise now, along with wages. Whilst I do realise there is a cost of living crisis, interest rates are very low now and not in double figures as they were for so many years. We couldn’t possibly have afforded children when we moved at that point, which is why we waited for over ten years and then only had one child. We had very modest and infrequent holidays, spent very little on ourselves or going out, but we felt it was worth it, and it ultimately helped us to get the house we’ve now been in for 30 years. We were relatively high earners at that time and took out the largest mortgage we could get. It’s a question of priorities and for us, getting the house we wanted was our top priority rather than holidays and children.

Of course it’s comparable. The property market has increased over 40 years, sure but likewise in 40 years’ time it will have increased too.

People lost their homes when the interest rates went sky high.

having said that now that I am older I would say that there is too much emphasis nowadays on having everything perfect immediately. It was previously normal to live with a crappy kitchen or bathroom for years.

In this situation no I definitely wouldn't.

I would hate to be in a situation where I had no money leftover. Particularly if you both hate your jobs, you put yourself in a position where you are basically trapped.

To me, just not worth it I'm afraid.

I live in a flat though and if I was in a 3 bed house with a drive and a garden, just for me and DH, I would be super happy. That sounds like loads of space.

How old are you op?

I'm going against the grain as my dad always said stretch yourself house wise whilst your young (he meant up to late 30s),

Its not comparable. Saying because this economic pattern happened in the past it will be the same again in the future is illogical. Past performance is not indicative of future.

The world is rapidly changing and economically it will change too. Jobs and job availability will continue to change as more AI is incorporated into the workplace. Resources are becoming more scarce, environmental impact is a key consideration.

But the key consideration is that wages are not keeping pace with house prices, so eventually younger generations just won't be able to afford to buy and the housing market will be impacted. Its incredibly naive to assume everything will just keep going the way it has.

As I said before, a lot of people have a vested interest in pushing the myth that prices will keep rising because their own property value and future is bound up in it, mine included, but its simply not true.

Personal debt levels are too high, wages are not increasing fast enough and technology is impacting the workplace. Lots of factors brewing. In such circumstances it would be wise to cut your coat according to your cloth.

I would stay put and enjoy the breathing room. We have a much smaller mortgage than we could afford and are saving to do renovations job by job. It's a pain at times but worth not having a panic over money on a regular basis. You never know what's round the corner, and the property market isn't what it once was. There are several affluent villages near us full of expensive properties on the market - so many I suspect they are being sold by people who overstretched themselves before the COL started to bite.

You said your cheeky offer was turned down but is that because you haven’t got a buyer. While I’m not sure you should stretch yourself if you don’t need to, however if you do go for it have yours under offer first. Yours may have been turned down because you still have a place to sell. I say this from having put an offer in at asking price that was turned down because we didn’t have a buyer yet. I think if you are going to put in a cheeky offer you need to have other benefits.

We were looking around again recently and came close, but ultimately decided to finally do all of the things we wanted in our current home to bring it up to the standard we had seen elsewhere. For example, we have lived with an old beast of an oven for years and ended up buying lots of countertop stuff to compensate - now going for my dream oven. I had done one bathroom up cheaply when we moved in but told myself it was OK for another 10 years, now back on the list. Upgraded insulation and larger radiators throughout. Working on a new porch next year so that the floors don't get dirty.

Basically trying to fix everything possible about our current home before taking on that bigger risk. Could you consider something like that?

If you did fall pregnant could you afford mat leave and childcare with the new mortgage - if not I’d stay put. Nothing would spoil a much wanted pregnancy than panicking about money.

Well, for me it would depend on how much you love the house.

My home means everything to me, if it was perfect and I'd fallen in love with it, I'd definitely stretch myself, as much as it took.

But it would have to be my "forever" home and where I'd want to stay for the rest of my days. If that was the case I'd put up with a few years struggling, and wait for the holidays/bathroom or whatever, knowing they'd get done in due course.

Yes I probably would but there are so many variables that that is probably not helpful for you- job security and promotion prospects, what you actually mean by stretching yourself etc etc.

Are you under offer? the way you are comparing the new house to your current house makes it sound as if you're not.

We did and I wish we'd stretched ourselves more.

I've taken everything you have all said on board and I think you're right.

The new house is a detached with the extra bedroom, utility room, just bigger all round really. We both wfh full time so the space would be nice, but not a necessity.

It's in a lovely area with good schools but there I am imagining a house for children I don't have, that I probably wouldn't be able to afford if I did had them!

Catch 22, we can afford it if we don't have children, but the house would be for the benefit of having children.

I'm going to stay put. Don't get me wrong, our house now is lovely and I'm happy here, I suppose we're always on the look out for the next best thing (which is not good for my bank account)

we did it as well and went for maximum mortgage and also doubled it. We don't repent it. I understand holidays etc but you live in your house most of the time, so we prioritise the house needs. we had four bedroom house before and current is 4 bed as well but thus is very spacious house. And our old house did not increase much in the value since we sold it but this house has increased nearly by 150k in two years.

Personally, I'd also make the decision to stay put! What are your pensions like? Having reached the grand old age of 60 I've been amazed at how quickly retirement has zoomed up on me. If you have spare money, I'd be putting a large chunk into reducing your current mortgage and paying into pensions.