To think my DB shouldn't worry as much he does re: mortgage size?

[ShellyBoobs]

My brother is looking to build or buy another house - not an extra one, just a different one to his current home.

He would really like to have a place with things like a large open-plan kitchen diner for entertaining etc, which isn't achieveable with his current place. He's decided to either sell then buy some land to build on (a plot would be circa £100k where is) or buy something already suitable or which could be internally modified easily.

He is quite open about his financial situation and has asked what I think he should spend, or rather what I would consider a reasonable limit. I thought that borrowing £100k or more would be perfectly reasonable, but he thinks it's too much and too risky.

He thinks he shouldn't borrow more than about £60-70k which wouldn't get him what he really wants. I think he could easily go higher. Obviously his own attitude to risk is important and I would hate to pressure him into borrowing too much, but he asked my opinion so I gave it.

His situation is this:
He's 39, currently single with no DCs
Earns around £35k and takes home around £2000 p/month net of pension etc. He's well qualified and even if he lost his job (unlikely at the moment) any other similar position would pay the same or more.
Equity in his current home is circa £150k.
He isn't extravagant and doesn't have other loans, debts or expensive lifestyle things to fund.

What do MNers think? AIBU to tell him think he could stretch to more than he wants borrow, if he chose to do so, and therefore get the house he wants rather than one that's just adequate?

If he wants impartial advice then why not send your bro to an IFA rather than a mortgage advisor?

It sounds as though having the bigger mortgage would stress your brother out, regardless of whether he could afford it or not. IMO that means it's not worth it as there's no point in having the bigger house if it's just a millstone around his neck for the next 30 years.

"even if he lost his job (unlikely at the moment) any other similar position would pay the same or more."

now there's an optimistic view!

Surely what he needs to do is to cost the project properly. He has £150k of equity and the land will cost £100k. He needs to work out what it will cost to build the house of his dreams and whether he can afford it; also what the profit margin is likely to be if he gears up by more than he is comfortable with and needs to sell in the future. If his building plan is a sensible one then I would have thought he would come out of this with a good profit. Is he planning to subcontract all the work or do some himself. If he were to start the project in the spring he could live in a caravan on site.

Sounds exciting to me and if he has no dependents he's in the perfect position to take the risk and some brave steps.

Thanks everyone. I'm trying to be as impartial as possible, hence my asking for opinions here, rather than just passing on my own ideas.

We're both aware that we're probably somewhat more conservative than the majority would be, due to our background, and it's good to hear what others think. I don't want to lean too far towards the optimistic side, just to appease my concerns about DB being pessimistic.

I'll tell him to seek professional advice but preferably not from a mortgage advisor.

We are both risk averse, yet have (soon will have) approx a £150k mortgage on a £40k salary. We're confident of being able to manage it, (small in our area etc) but if we weren't we wouldn't do it. I don't think it sounds like a massive deal in his shoes, but he has to be comfortable...but there is no point getting in more debt for something he doesn't love.