To buy a bigger house

[baublegirl353]

Just seen the house of my dreams online and am seriously thinking we should buy it. But am paralysed with fear about moving and taking on a bigger mortgage.. help me decide?
Current house is big enough, but only just. And with 3 teenagers who are unlikely to be leaving home for years, we are already trying to think about how we will change things to fit. We have 4 beds, but the 4th is tiny, so the two youngest share. This is not always a happy situ. I work from home so use the 4th bed as an office. Husband also wfh at the mo, this is likely to remain a thing perhaps 2/3 days a week. He works in our bedroom.
The new house has 5 beds, so all kids could have own rooms, plus an office. It also has bigger receptions and a great garden & is perfectly placed for the younger ones school. But it would nearly double our mortgage. I think we would be ok, but only just, and everything would be about counting the pennies, which isn't ideal just when the kids are at their most expensive. We are mid forties and would need to take mortgage back up to 18 years to make it doable. But because of the stamp duty drop we could afford it, which we couldn't have previously.
I guess I'm just wondering if this is the wrong time in life to suddenly have to cut back on everything, and if by staying where we are and having more expendable cash we would be happier? Also obvs need to take into account economic situation in general, tho we both work in sectors that are not currently affected by Covid and are less likely to be.
Wwyd?

Why won't the teenagers be moving out?

I wondered about the teenagers too - why wouldn’t they move out? Are they older or younger teens?

Could the ones at the older end be part of the discussion i.e. if they’re likely to be staying until their early to mid twenties they should be expected to pay room and board. Are they prepared to contribute?

If interest rates went up would you be in trouble in a couple of years?

Quite easy to see why teens won't be moving out. Youngest might only be 13, even if they do uni, they need a bedroom, and many don't leave to 21. My eldest 2 were out of the house by 19 but following lockdown and redundancy eldest is back at 25.
In your situation seriously consider it. Do a long term fix. You don't have to pay for 18 years.You could downsize back when kids safely out of your hair.

Also are there other options - garden office, extension, loft conversion?

When we last moved we got a house that had 2 really decent rooms for us and youngest and big enough for eldest 2 to come and stay but not move in. I wish that I had really gone a bit bigger and taken a small mortgage tbh. Especially now we are wfh.

@jay55

If interest rates went up would you be in trouble in a couple of years?

This.

So many people I know are moving house at the moment because they can afford it now. However ‘now’ being the keyword.

Is your current house on the market?

To answer some Qs:-
Teens unlikely to move out as youngest actually not quite teen, eldest GCSE. In South East so even renting is extortionate and would expect them to be bouncing back & forth with Uni etc
Current house at limit - already in loft and kitchen extended. Nowhere else to go. Have possibility of a garden room but these seem v expensive to do properly (insulated, heated etc) and prob only suitable as office, not bedroom.
We would do a fixed rate mortgage as rates so good at mo, so would keep at same rate for 5 yrs minimum.

We are not on market, no. We would have to rush to do so.
Current house also needs money spent on it eg bathrooms are tired (but plain white so not offensive) and we will need to spend next few years spending out if we are staying here

@baublegirl353

We are not on market, no. We would have to rush to do so. Current house also needs money spent on it eg bathrooms are tired (but plain white so not offensive) and we will need to spend next few years spending out if we are staying here

Has that house just come on the market, or has it been on a while?

Because you wont be able to offer until yours is sold. Well you wont have an offer accepted, that is.

Tuemay yes I know that. It's just come on. We would rush to put ours on if we decided to go for it

When looking at the money side do take account of rising interest rates, they are bizarrely low at the moment although we are unlikely to return to the other extreme of the early 90’s.

But if that works, go for it, imagine what it will be like in 5 years time when they are all much bigger.

Also maybe set the mortgage term longer than 18 years if you can then overpay, so reducing the term unofficially. That way if interest rates do rise in the future you have a lower monthly commitment so a bit of a safety net.

Tuemay yes I know that. It's just come on. We would rush to put ours on if we decided to go for it

Are you confident yours will sell quickly?

Even if it did, it probably depends on where you’re located. Where I am (Scotland), properties are being snapped up at well over the asking price within days. The property you’re after may be well gone by then.

Think of potential future costs for your teens. If they plan to go to uni d depending on your income, parents are expected to top up loans. Your DC will not be able to manage on the minimum loans as it won't cover the rent!!

Before committing to buying a large house I would check your ability to be able to support your DC if this is a path they take.

Lots of parents are not aware of the financial support needed for University, outgoings like mortgage etc are not considered.

I think anyone would be mad to overstretch themselves financially, especially in this very uncertain economic climate.

You’re only mid forties so you could get a mortgage over a term much longer than 18 years to lower your monthly payments.
Presumably, you’ll downsize when you retire? Even if you retire early, they’ll be in their 30’s? You won’t need a huge house then but you do need one now.

I guess I'm a bit unsure about whether we would be over stretching ourselves. We always had a mortgage that we could comfortably afford on one salary as I worked v part time when the kids were small. But in the last 2 years I've increased my hours and am bringing in more - but I'm self employed so it's never guaranteed. Having said that, the area of work I'm in is super busy because of Covid/unemployment so unlikely to drop off in the short term.
I'm not used to taking into account my own earnings as part of our joint funds, but I should now. But then I get the fear!

Depends what you mean by 'counting the pennies' and cutting back. If your jobs are secure and you'll still have some disposable income eg still be able to afford to go on holiday, replace cars, white goods, have some days out etc then go for it.

But if it means you'll be on a much reduced budget, you might not qualify for the mortgage needed, so the decision might be taken out of your hands anyway.

@Movinghouse2015

Think of potential future costs for your teens. If they plan to go to uni d depending on your income, parents are expected to top up loans. Your DC will not be able to manage on the minimum loans as it won't cover the rent!!

Before committing to buying a large house I would check your ability to be able to support your DC if this is a path they take.

Lots of parents are not aware of the financial support needed for University, outgoings like mortgage etc are not considered.

This is something I'm aware of and worry about. Uni is so expensive now

I wouldn’t be put off by the fact you haven’t got yours on the market.

Same scenario. Our old house was just big enough at a squeeze.

Viewed the perfect house on a whim. Offered during the viewing and the offer was accepted.
We put our house on the market the very next day with the agents that were selling the house we wanted to buy. It sold in 3 days.

It’s not impossible.

We moved like you and it's the best thing we've done. Everyone is less stressed less arguing. Sssooooo much space. I am very happy though at the time I had worries.

The mortgage isn't that expensive either as interest rates so low.

How small is the smallest bedroom. If you put a garden room in to be your office and moved and gave the small bedroom to one of the dC would that give people enough space? You have two more years of everyone living underfoot, but the eldest will likely be off to uni and it all becomes more manageable (suggest room switches when that happens).

Pinching the pennies now and it probably still feeling very tight when you have children at Uni and need to fund that too doesn’t sound like much fun. The counter to that, of course, is that if you traded up that extra cash would be going into an asset that you could later sell off as part of your retirement planning. Maybe talk to a financial advisor and see if it would make sense to drop some pension contribution in place of the larger mortgage.

@BarbaraofSeville

Depends what you mean by 'counting the pennies' and cutting back. If your jobs are secure and you'll still have some disposable income eg still be able to afford to go on holiday, replace cars, white goods, have some days out etc then go for it.

But if it means you'll be on a much reduced budget, you might not qualify for the mortgage needed, so the decision might be taken out of your hands anyway.

Having done the sums on a mortgage calculator they would lend us much more than we need but I would never want to borrow that much. We only have 12 yrs left on current borrowing hence why not wanting to extend it too much, but could go back to 20 yrs I guess

@BoomBoomsCousin

How small is the smallest bedroom. If you put a garden room in to be your office and moved and gave the small bedroom to one of the dC would that give people enough space? You have two more years of everyone living underfoot, but the eldest will likely be off to uni and it all becomes more manageable (suggest room switches when that happens).

Pinching the pennies now and it probably still feeling very tight when you have children at Uni and need to fund that too doesn’t sound like much fun. The counter to that, of course, is that if you traded up that extra cash would be going into an asset that you could later sell off as part of your retirement planning. Maybe talk to a financial advisor and see if it would make sense to drop some pension contribution in place of the larger mortgage.

This is the other thing - I don't have a pension and am concerned about this (self employed for 15 yrs, no spare to put away until now) so property might be the way to go.