To stretch us to the limit for a house?

[Maneandfeathers]

First world problems coming up.

We are currently looking to move and DH and I can’t agree on what to do.
We still need to sell ours anyway but are looking at styles/prices of houses and are in talks with mortgage advisors about what we hope to be able to afford.

DH wants to stick to the lower end of the budget and buy a house that we will easily be able to afford along with extra money spare but that won’t necessarily fit all of the criteria. The types he is looking at are smaller 3 bedroom semi types with small gardens in estate type areas and are coming in at about 100k less than we can afford to borrow according to the mortgage advisor calculations.

The homes I prefer are the much larger family homes, more rural with much bigger gardens. We have also seen some large 3 bed Victorian semis with large gardens. These ones would stretch us to the top of the budget and are 100k more than the first time (well some of them!) but would hopefully be a home for the rest of our lives.

DH thinks AIBU to want to buy a house that means financially things will be tight, not unmanageable but we would have to cut back a lot whereas he would rather have a smaller house and plenty of disposable income. He thinks the house will become a prison if we can’t afford to do much but house things but people are telling us to buy the most we can afford.

There isn’t much in the way of finding a house in the middle, houses tend to have a big jump in price here between the two styles.

I can’t get the idea of a lovely perfect family home out of my head though, is it all that it’s cracked up to be?
AIBU to push for the larger/better home?

I think we must live in a strange place

We are rural UK in a small village. The village extended into a few new build estates which are where the smaller houses tend to sit. They are small 3 bed semis mainly on small plots, not much room to extend. Big enough for us to be okay there but not spacious and not much potential.
Other than these new build estates there are a few streets/rural properties dotted around for sale. These tend to be much more expensive as they are classed as the ‘old village’ and as a rule don’t come up that often. Mainly Victorian semis or old farm style buildings.
There’s the odd terraced street also which we wouldn’t consider as no gardens.

The third option is a new build estate that’s popped up- starting at £275k for a tiny 3 bedroom detached

We won’t move from this area due to schools etc so it’s one type or the other.

We've just bought at the top of what we could borrow. We made some money on our first house and have bought a house that we hope to not have to move from until all the kids leave home (youngest is 12 months). If we had bought smaller, we would have needed to move again in 5 years time (3 kids so wanted a 4 bed house).

We have bought in an up and coming area, and we are both in jobs with a good potential for career progression.

Also our mortgage is now 25% of combined take home pay so there is enough left over for everything else, and once the baby is out of nursery we'll feel positively comfortable!

If there's only 3 of you, do you need a large 3-bed Victorian semi? Sounds like a smaller 3-bed would work just fine. I would be very loathe to borrow over four times your combined income, too. That income:debt ratio is certainly riskier than I could tolerate.

If you're like me your home is your castle and spend most of your spare time there. I say do it!

Victorian houses look beautiful but they can coast a lot to maintain.

My friend and I bought houses at roughly the same time 20 years ago. Hers was a real dream home and cost double what ours did. We paid our mortgage off within 7 years, she has recently paid hers off. We have had lots of really lovely holidays. She didn’t have any kind of holiday at all for five years nor much of a social life.

About it being an asset as well, until that asset is liquidated or you borrow against it or you die it’s actually just somewhere you live or hopefully a home you love.

Plus being useless at saving if you are lucky enough to be able to do it and choosing not to do it is just quite frankly ridiculous. You could save half of that £500 per month and have a nice holiday social life on the rest.

We went £100k below what we could have borrowed, personally we didn't want the stress of it one of us lost our job etc being bound to a mortgage any bigger than it had to be. I agree with your DH.

Thankyou all!

The smaller 3 bed semi would be fine size wise...it’s more what comes with the larger one that I prefer, more parking, larger gardens, further from neighbours etc. I would prefer to be on a street than estate.

The layout of the smaller ones doesn't seem to work as well for us. I prefer somewhere to put the dogs to dry off (utility or seperate space) whereas the smaller ones tend to be more open plan/no hallway/no porch which make life much more difficult. I also really would like more storage space as we currently have 0.

Really we don’t need a massive house, I just have a dream of a house with large gardens and spare rooms to put things which I can’t seem to compromise for! I’ve seen a few smaller ones and I’m being a brat and don’t want to look at them as they aren’t what I’m hoping for in my head.

We are planning to save £500/month and put ours up for sale in February. Depending on how long it takes to sell and how much it sells for, if it does at all, we may have some more money to put towards it all. Ideally I would like to have a few thousand left over from the whole thing!!

We do need to sort out the saving problem. I was homeless at one point and we have spent the past 5 years getting out of debt/maternity leave hence no savings. Now we are debt free and can save but we have never bought anything ever so have spent a while enjoying ourselves a bit

If you can hold off on the move for as long as you feel comfortable to do a bit more saving, I would go for the bigger house. Are your estimates with 25 year mortgages? We took ours out over 25 years but a few friends have recently taken out 30-35 year mortgages with the assumption of overpaying as their salaries increase (we're late 20s). Longer terms could be an option for you. I'm at my lowest earning potential currently having just finished two maternity leaves and only returning part time so factored that in when calculating everything.

large house we would need to cut back on all luxuries but should be able to afford essentials

The large house is a no go then, for me.

OP have you looked at bungalows? They usually come with nice gardens and lots of living space. Always the option to go up into the loft if needed then too.

As someone who had a mortgage in the 80s when interest rates went over 14% I would be very wary of pushing yourself to the limits with the uncertainties of Brexit around the corner.

As a result of past experience we never pushed ourselves too much. It meant that even in the even of higher interest rates we would be ok.

What we did was buy a cheaper house, in a good area with scope to extend and improve.

20 years later with an extra bedroom, extra bathroom, landscaped garden and garden room extension we are very happy.

We stretched ourselves and I don’t regret it. Money was tight initially but I think it’ll pay off eventually if or when we come to sell. Yes if one of us lost our job we would be in trouble and who knows what the future holds but should the worst happen we would just have to move.

You've already said you've been in debt, as well as homeless at one point , and that you're hopeless about saving. You also haven't quite decided if you want more children, which (if you did) would obviously have a serious impact on your income.

It sounds to me like you are pushing your DH into making a very serious mistake which could get you into more debt that you risk not being able to service.

Put your sensible head on!

Personally, if I were you, I'd stick it out in your current house for a bit longer, and save more money. Wait until Brexit is resolved (if you can wait that long ) and see what's happening with interest rates - plus your own salaries - and then make a decision.

What I should say though is we bought a run down house in a good area. We have massively altered it so increased its value.

Normally I'd say go top end, houses in the long term always increas in value, but if you are doubting being able to afford the essentials and doing maintenance then I think your husband is right.

I think it depends in your financial expectations
-have you got student loans that you will stop paying at some stage
-is your child of an age that means childcare will reduce in the next few years

• are you in jobs which will lead to promotions and pay rises in future?

Have you got expenses that you could cut elsewhere if needed (memberships/subscriptions etc)

If your financial picture will improve over the next few years then stretching yourselves is a very different prospect.

Don’t go for the victorian house with the big garden if you don’t a) work very parttime and b) are enthusiastic about diy and gardening (or c -have a lot of money). maintaining big gardens is a significant job, and so is property maintenance for an old house.
All that plus the current economic uncertainty- stay well within your budget!

We stretched ourselves, albeit 20 years ago, we had one dc at the time and agonised over whether to go for that house which was a bit bigger and more money. A colleague of DH advised us to buy the best house we could afford and it was good advice which we took and we have never regretted it.

I'm with your husband on this - never push yourselves to the limit! Interest rates may rise (I'm old enough to remember mortgage rates in double figures). Be realistic about what you can comfortably afford, living in the perfect house with no money to enjoy it could but a huge strain on things.
You have one child - you don't need a huge house.

We stretched ourselves to buy our house ,which has a big garden, is detached and has plenty of room .It has been very tight at times ,but I think it was worth it TBH. The problem is if you buy a smaller home you will never be happy ,as you will always be thinking "if only"!.Also the first few years may be tight financially ,but you will recoup your outlay by having a more desirable property .

I would stay for a bit and sort your saving process out.... then really see what you can afford on a monthly basis and work back from that -

I'm in between as moving is expensive so I wouldnt want a small boxy house if I knew I could afford a more spacious house....
although large gardens are a surprising amount of work...

do you really have to stay there? what age is DC ? if primary (village) where will they go secondary.....what would your housing options be then

I currently only work part time (28hours) so in theory could up my salary if necessary although I am near the top of my scale. I could do nights/locum for extra.
DH is in education on the upper pay scale, could go up but not guaranteed.
Child of primary school age so no childcare costs. At the moment no children planned but never say never!
We do have expenses that can be cut back on but some of them I would rather not if we could do both. We both have hobbies, enjoy going to the cinema etc.

The homelessness was unavoidable. I was thrown out by my fathers new wife and had nowhere to live. Couldn’t live with DH (then DP) as no space so we borrowed 5k to add to the small deposit we had saved to buy where we are now. We also took a loan so DH could do a masters degree and get the job he currently has, he worked for a year unpaid so I supported us on my tiny student wages and we struggled massively. Inbetween this I got pregnant and had maternity leave which crippled us and it’s taken 5 years to get to the point we are debt free, have 30k equity in the house and have enough of an income to be able to support ourselves with spare. Like I say we have enjoyed the spare money and have had a few holidays/new car/some nice nights out and are planning our first decent christmas

Our current house is lovely but tiny. Think 2 tiny bedrooms, one small bathroom without a shower and two small rooms downstairs. Not one cupboard in sight.

No interest in DIY particularly

We have been doing some calculations last night. If we buy at 170k we would have around 1.5k left over each month. If we buy at 250k it would reduce to more like £500 which is a massive difference. That would need to include savings, Christmas, upkeep of house, unexpected things like broken boilers etc.

I think DH is right as much as it pains me to say it.

If you didn't have a child is risk it, the two of you would work things out if things went wrong. However, I think you owe it to your child to provide as stable a home as possible, therefore I wouldn't be stretching myself at this stage. I'm in a similar position, but we live in the type of house your dh wants to buy (small garden, semi etc), it's very tempting to look at bigger homes that we can just about afford, but it can wait for now.

Depends on how stretched you’d be

Can you not get long term fixed so interest rate rises won’t affect you

Also do you have childcare costs likely to reduce?

The cost of buying is a lot so it can be good to avoid doing it again

the easiest way to decide is... if your husband is injured and out of work for a few months (or longer) can you keep up with the payments of everything on your wage... if it gets to the point of living wage to wage and struggling to pay everything then it is really unwise to buy the more $$ home