WWYD? Upgrading to a better home vs having a large amount of disposable income

[Stephlingx]

DH and I are late 20s, purchased our home 2 years ago - private sale for a very good price, so we have a relatively low mortgage for the house we have. Since then, our circumstances career wise have changed dramatically and we now have a large amount of disposable income left each month after mortgage and outgoings. Currently have no DC, but house is large enough to accommodate a family and is also close to a good school. The downside is that it’s a newish home on an estate so there are the usual issues associated with this e.g. not enough parking (driveway space for one car), v close to neighbours, overlooked from all angles and overall the area we are in isn’t particularly ‘salubrious’. In this situation would you:

A) stay put and enjoy the disposable income. Short term putting money in to savings but also spending on holidays, meals out etc. Longer term, option to not have to go back to work after DC, regular family holidays, private education etc.
B) stay put but dramatically overpay mortgage. Mortgage free within 8 years (albeit not in the ‘dream home’)...would get by but no luxuries and would be scrimping and saving if had DC during this time.
C) sell home, use equity as a deposit to buy dream forever home in a desirable area. Mortgage repayments would be considerably higher. Manageable now and even if had DC (could just about afford to cut down to part time hours), but no room for luxuries such as regular meals out and family holidays etc.

It’d be really helpful to hear what you’d do in this situation!

C absolutely for me. Now is the time to stretch yourself, ie when you don't have kids and the bigger forever home will accumulate more in value than your current house.

Also, if your jobs are stable, then likely your salaries will continue to increase, so by the time you have kids, you'll feel more comfortable financially as you'll have had salary increases and you'll already be set in your forever home.

In all honesty I’d move now. Not necessarily into a dream forever home at the top of your budget but one I’d be happy in with a family for the best part of 20 years while kids are growing up, school years etc.

Moving once you’ve got kids is much more of a pain than before plus if you’re planning to reduce hours your salary will change and the mortgage you can get will be effected.

Absolutely stay put! Have some holidays, a worry free maternity leave etc. Reconsider after you've had children and they are at school.

I would stay put for now, if you want children work out living expenses and try to save enough to live on for at least 1 year off and 2 years part time, if you don't have kids you still have a good chunk of savings which you could then overpay mortgage with or a hefty deposit towards option C

I would try and work out exactly what is discretionary spends after bills etc, keep 15-25% for eating out etc, save 50-65% for long term either to pay off mortgage, extra time off when having a family or whatever and 20-30% short term savings for holidays, cars upgrading etc

it is easier to upgrade house now but make sure mortgage affordable on 1.5 salaries as even if you go back full time approx 50% will be childcare ( I don't mean you are responsible for childcare costs but effectively to pay for childcare you and DH will only have 75% each the other 25% will be on childcare obviously if you go back part time the child care cost will drop) make sure you have some savings at least 3-6 months living expenses don't over stretch yourselves

don't just live the high life you will regret not saving at least some of it
but don't over stretch so you are baked beans with no holidays to get a "forever" home

I wouldn't be making any financially stretching decisions before we see how Brexit plays out. Would do a mixture of A and B, to review again mid 2020.

You will not get nearly the same lent to you by mortgage companies once you have kids. They will factor in this (costs of a dependent, childcare fees etc) into how much they will lend you. So if you want a different house do it now.

If you've got good state schools then private schooling is an utter waste of money. People think they are buying opportunities/better education. All the evidence shows that if you compare similar ability children then they do just as well in state. If you have a belief (ie not grounded in evidence) about private schools then all well and good, but if you were trying to buy financial advantage your kids (better grades, better uni, better job type logic) then you'd be better off getting the offspring a buy to let with the cash.

Save, save, save. Kids cost a bloody fortune especially childcare if they're going into nursery.

I honestly wish we'd saved so much more when we were DINKYs.

You will not get nearly the same lent to you by mortgage companies once you have kids.

This is something to consider... you may be able to afford a larger mortgage in 5 years time but if you have children and the bank risk calculator says “no” you are a bit stuck...

I would probably do a combo of A and B. Having a large home with small children that needs a lot of work doing to it and needs cleaning/tidyng etc is difficult.

We had a smaller home when the children were small and then moved to our big house in time for number 2 to start school.