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?

Be patient OP. Your middle ground house will come along.

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.

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

In the curent climate, he is.
Imagine if you could gear yourselves up to get good at saving.
Use it as an excercise in how skint you would feel burdened with Perfect House costs - get used to living this way & see how it feels.

With £1500 a month, in 5 short years you could have saved £90k., before accruing interest.
And there's your fund for Perfect House - all without risk & financial stress.

I think I don’t want to be seen as a failure or the one with the tiny rubbish house

Darling, you won't be a failure if you can save £90k in 5 years, & then achieve Perfect House so much more comforably & without such a mega risk.

& what's all this "seen as"?
Nobody else's opinion about your house matters.
The ones who are swanking with bigger houses, cars, appliances, holidays etc are mostly doing it on credit. It's all bullshit unless you can comfortably afford it, & have a BIG buffer for emergencies & change of life circumstances.

I would go for a compromise house but overpay as much as you can so if you want a bigger house you can move again or save to extend.

Keep looking and hopefully you will know the right one when you see it.

When you have calculated the money left over after your mortgage/other obligations have you accounted for absolutely everything including the out of school activities/swimming lessons/instrument lessons/school trips and camps that your child may want in the future (if they are currently young) and the meals/days out/ holidays that your family would want to enjoy? Dental costs and hairdressers? Clothing/shoes and uniform? ...

I'm with your husband.

I'd get really anxious knowing I'd really stretched myself. Secondly you don't know what life can throw at you.

I think I don’t want to be seen as a failure or the one with the tiny rubbish house

This is interesting, and I must admit to having similar thoughts when we bought our current house. We live in a small, cheapish village in the midlands and on paper could have afforded basically the most expensive house in the village! Tempting.
However... in reality it would have meant we’d have very little disposable income and it would have taken a very very long time to build any sort of buffer back up. We ended up buying a 4 bed that was quite a bit below our maximum, and which also needed a bit of work (nothing structural, mainly just updating). It has meant we’ve been able to slowly do this to our tastes while also having enough disposable income that we’re not worrying about affording things.
In reality it’s not our forever home, but we will reassess in a few years when we’re out of the small child years and have built up some more savings and equity.

seriously my friend and I moved within a year of each other. Our mortgage is 80k less than they would lend us. They stretched themselves to their limit. Now we get to do lots of interest things, holidays, purchases, events etc and decorate how we want without too much stress. They are struggling to afford the things they need and having to make house decisions based on cost rather than what they want. They can’t afford to do much of the fun stuff and are constantly complaining about being broke. The house also needs a tonne of work so they are living in chaos and will be for several years (the house was more expensive than ours too but in a posher post code). I would go for a house that gives you a happy medium of enough space and nice enough area without pushing it to bells and whistles and leaving yourself short

I now have a good career, have an income of 60k and a family. Surely it’s not that terrible to want to better myself

Your income is £60k? What does your husband earn? If he's earning anything above £20-£25k then you should easily be able to afford a £250k house, no?

I'm with your husband on this one. Having your ideal house would be great but you also want to be able to enjoy your lives.

Also, I do think that as a general rule, MNers tend to be ultra cautious about money/mortgages.

There's no point buying the "Ok" house if you're not going to be truly happy there. You'll be planning your next move from day 1 because you'll wish you'd gone for the dream/forever house. Then you'll have to spend a fortune on another set of moving costs when you do eventually upgrade. Been there, done that...

@ Dongdingdong I meant household. DH is the higher earner as I am part time. If I went full time it would be more like 70k/combined but I don’t want too until DS is older. Obviously I would if we were in financial difficulty.

We live in an ex mining town where the average income is low, very low. In fairness we feel fortunate to have as much money coming in as we do. We are the highest earners out of our friendship groups and family also.

Saying that I do feel a lot of pressure to prove myself and to get a better life for DS than I had myself. I have always wanted to be in a position to be seen as a success especially given where we started. DS is my main motivation, I want him to be able to have friends around and not feel ashamed, so kids even think like this I’m not sure?!

With the larger house we won’t be able to afford many activities for a few years at least. DS is almost 4 and starting primary in September but we do a fair amount as a family. I also want to stay within the village primary school area as the next school along isn’t good.

Option 3 would be to stay here in tiny house but remain squished and also risk loosing the equity in this property if house prices do drop and being stuck here. At least if we are in negative in a bigger/medium house we don’t have to worry about moving again but if we were stuck here it would be a bit of a disaster!

I generally agree Dongdingdong, but the figures the OP is quoting just seem too tight, and I’m not particularly cautious. £500 a month to cover everything she’s listed, including holidays/savings/house repairs/Christmas/birthdays/clothes/shoes etc plus any other unexpected expenses is tight!

DS is my main motivation, I want him to be able to have friends around and not feel ashamed

But realistically, why on earth would he be ashamed of a 3 bed new build?

Depends on your life plan...how many children do you have/intend to have. We live in a 3 bed period semi, but only have one child. That is our plan, so I don't need to worry about needing/wanting a larger home.

We easily afford the mortgage and have plenty of disposable income. Holidays are really important to us and want the flexibility to pay for private secondary school if we need it down the line. I wouldn't want to have a large payment then not be able to renovate, afford holidays and other things without worrying - sounds miserable.

DS is my main motivation, I want him to be able to have friends around and not feel ashamed?!

C’mon now, this is ridiculous. Why would he be ashamed of a 3 bed house and financially sensible parents?

The more you post the more messed up your attitude to finances sound. I think you need to sit down with your DH and figure out some sensible priorities when it comes to money. Model what you can afford, even if times get bad. Put a plan in place for savings and/or over payment of mortgage.

I’m in Ireland and I’ve seen what happens when ppl over extend and there’s a recession and a crash. People are ruined. It’s not pretty.

As for the embarrassment thing kids don’t care about the size of their house but they feel it when they can’t have the same experiences as their friends. My friends kids def feel they are missing out a lot atm and truly I don’t think they give a crap about the house. As long as there is enough space anything else is a bonus. Life experiences are priceless though and will shape the child long term

@Maneandfeathers

At the moment we are currently on a rubbish mortgage rate

You do realise, don't you, that mortgage rates are very, very low at the moment?! If you think you have a rubbish rate now (what is it, by the way?) then that also suggests you haven't got the flexibility in your disposable income to deal with a rate increase.

However, I also agree with PP that it's not really a good idea to move into an interim house if you're going to have to move again shortly after - as moving is expensive.

Is there any way you could extend your current house? Loft extension, or extending into the garden? That might give you more space and be more affordable.

We are on a variable rate of 5% which I thought currently was crap. We have just ran out of fixed term a month ago but don’t want to fix again for another 2 years and pay the penalties. Our mortgage currently is very cheap because the house is cheap, we can afford it very easily.

There’s no way to extend sadly, nowhere to g go up or down

OP I think moving because of the space is reasonable but I wouldn’t be bothered about other people’s opinions about the size, style etc. . If you’ve got the space you need you can make it visually appealing with some clever decoration. Half my interior is done with “pre loved” furniture and soft furnishings to save money. The location is also important as we all know so
I’d stick with the best area you can afford . My DD goes to visit friends who live in flats, who share bedrooms with their siblings and never once has she ever commented on it. Kids don’t worry about these things.

Can’t you meet in the middle? £100k either way is a big difference in what you’re looking at.

Also, just because a mortgage provider will lend you that much it doesn’t mean you can afford it. Speaking from experience, having a huge mortgage hanging over you isn’t fund. Could you still afford the repayments if one of you lost your job? I know we couldn’t because our circumstances changed (went back part time after maternity leave etc etc).

I think you should go for the larger 3 bed style you mentioned. £500 left over after bills and food is okay. I'm really not seeing why people are saying that is tight.

Also I think some pp think you are talking about a bigger than 3 bed house when all you are reaching our doe is a 3 bed semi with decent garden and parking. Not anything unusual or over the top.

I actually don't think that is stretching yourself as it sounds normal to me and you should save no matter what is left over.

A larger 3 bed with the garden and parking will be better if you have to move for any reason later down the line as generally more desirable. And your current house does sound too poky and small.

I'm a home bod so where I live is important to me. Experiences and travel may be more important to you but everyone has different priorities.

But in any case, on your family income and with room to increase hours if necessary, then a house £200 to 250k would be what I would aim for.

Keep looking and saving and when a house comes up low enough, pounce straight away.

And it is understandable not fixing now on tour old house, if you want to move as you don't want to be tied in and then pay a larger fee.

I think some posters have missed that point.

So your new mortgage on a lower fixed rate could actually be even more affordable than expected.
I would move now whilst interest rates are low and fix for 5 or 10 years.

The person saying to save £1500 per month was interesting. Maybe save £1k per month and still have enough disposable income. That would go a long way to making a bigger house more affordable. Also that would be getting used to what you would pay for the larger style house.

I think we are getting to the truth now, basically you want as big a house as possible so you can look successful to everyone else, despite this causing you financial strain on your family?

we are the highest earners out of our friendship groups and family as well

And because, as the above obviously means a lot to you, you feel the need to demonstrate you are the highest earners by buying the biggest house you can barely afford?

OP you are coming across as very shallow and immature.

OP what will you do if your contraceptive fails and you find yourself pregnant? If you had the bigger house, would you be able to afford maternity leave and childcare costs?

You can't afford to stretch yourselves so much, and you need to learn to save. Get the spare money put into savings as soon as you get paid, then you wont spend it.

Go to MoneySavingExpert.com to their debt free board, and download the budget form, and fill it in using your current figures, and the projected figures for both the possible houses. The form includes things that lots of people don't think to budget for, such as presents, haircuts, car running costs, entertainment etc. This will give you more accurate figures than if you're just adding up the utility bills, council tax and so on.

Kids don't care how big or small a house is. They'd only be "ashamed" if it was a tip and filthy. Also, a pp was right, they're more likely to be upset at missing out on trips and holidays, especially if all their friends go on them.

Forget about superficial notions such as looking successful. It means nothing.