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?

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

That’s actually more of a concern since OP has said it will be a matter of counting the pennies. Interest rates can’t really go down, but if they go up the could be a big problem, depending on the mortgage.

Smallest bedroom only big enough for a bed, nothing else. No one wants to sleep in there!

Cross posted, sounds like you could afford it, but the point about university is a good one. Would you have money to contribute for them, possibly 2 or 3 at the same time?

Although alternatives to university are becoming more popular, eg graduate level apprenticeships, so they may not follow the traditional route anyway.

Is the house a good price or is it cheap? If it’s a normal price, maybe rather than buying this one; you could look into mortgages etc more. Do it all more slowly.

Sorry for random semi colon

@ThickFast

Is the house a good price or is it cheap? If it’s a normal price, maybe rather than buying this one; you could look into mortgages etc more. Do it all more slowly.

I don't think it's cheap - more that it's quirky, perfect location, and just a huge sense of space (older property). You can get similar with same bedrooms for same price but modern so much smaller and less storage etc

You won’t have time to do renovations and get on the market because the property you like will have already been sold (if anything like the area we live). But there will be others. Now is a good time to sell and buy; reduced stamp duty and low mortgage rates which can be fixed for 3/5 years. From what you have said I would go for it.

I would book a viewing at the house. There might be a problem you're unaware of. Or you might see some sort of solution.

OP I was in a similar situation and I would say do it. OH and I bought a much bigger ( 5 bed) place and an 18 year mortgage in our early 50s having 15/16 year old teens and a very elderly parent,
Although the mortgage term seemed daunting we took out the loan with the intention of not staying in this new place for 18 years.
We guessed we would need the place only for the next 5/6 years max, then we would sell and down size to a place we could afford for our retirement.
The house we bought is in a very desirable area and we knew we could sell it easily when the time came.
As it happens our teens didn;t turn out to be as expansive as we thought they would be- only one went to University and chose a course with a generous non means tested bursary, also works during her course, so hasn't cost us much at all.
The eldest is still with us ( 22) and my mother, but the plan of selling soon has also been delayed a bit.
The extra space in the house has given me a lot of opportunity to develope my own wfh business, which has taken off to atronomical proportions, and pretty soon we would be able to pay the whole mortgage off .
The value of our property has also jumped sigmificantly in the past couple of years ( new railway station and line directly into the city nearby) so increased equity.
So at some point will just be OH and I in a 5 bed home, we would then still have the option to downsize, we will see when the time is right.

My point is that taking on a big house and an 18 year mortgage doesn't tie to to that specific path for the next 18 years. If it suits your needs and you can afford it I would say go for the space and rethink things in 4 or 5 years.

I absolutely would. Sounds like you can afford and it would make everyday life better for everyone. Definitely a long term fixed rate mortgage. The term can be extended now or in the future and you could downsize by retirement anyway.

Ok, I’d go and have a look then. If it was just the type of house that comes up often, I would take your time. But if it’s a bit unusual then go and have a look and really really look into finances.

Have not read all posts but you seem very keen on bigger house. Have you remembered a lot of predictions are that there will be a property market fall/crash? No sign of that yet though. A large ''shed'' in garden might be a better idea - for one of you to work in during day and possibly someone sleep there at night.

My concern would be that this house will be snapped up, has potentially already had offers. The housing market is crazy at the minute. I know 3 people who had offers from the first day of viewings and all have been at or over valuation.

So I wouldn’t set your heart on this particular one until you’re on the market and in a position to make a proper offer.

Talk to a broker. We overstretched ourselves just before the lockdown, because we felt like we were at height of earning and if we didn’t jump now we would be able to later. It’s a source of stress for now but only because we didn’t sell other property (switched to BTL). In London so bonkers market etc. But having more space has been amazing in lockdown and it’s our forever house.

Was surprised how much we could borrow. But restrictions have come in. Even chains do work.

Doesnt sound like you’ve actually seen it yet- go see it as well as talking to a broker!

Just remember with a bigger property comes bigger bills.
We moved into a bigger house and have less day to day money than our friends do with smaller houses. The thing that shocked me was the jump in the bills from what we were used to. We’ve both agreed we did the right thing for us (3rd year in our house) but I do think about money more than I ever did before!

Interests rates are unlikely to go up for a good long while given the outlook.

You are right about teens bouncing back for many years, this has become normal for all of my friends with most still living at home and they are approaching 30. The rent is sky hire and means they will never ever be able to afford to buy unless they stay at home for years.

I would do it actually. The children will not shrink in size and the added space will be far more comfortable. They can also contribute as they get older and get jobs (whilst they save)

*high

We did this, 2 people, no kids at home, no mortgage. We’ve taken out a 10 year mortgage bought a bigger place, with a garden that needs work.

I’m v glad we’ve done it, the space is wonderful, the garden great, work has been delayed due to covid but house is fine to live in without it.

It’s never been cheaper to borrow.

We will probably downsize eventually but the house will be easy to sell.

Is there no middle ground between staying where you are and nearly doubling the mortgage? A cheaper four bed that you could put a garden office in or convert the loft, for example? Unless you're talking a tiny mortgage, that seems a huge leap for what is only really a requirement for one more bedroom: the other things you mention are just nice to haves.

I say go for it! Sounds as though you need more space and it’s your dream house! My dad always says to stretch yourself as much as you can when buying a house as it’ll pay dividends in the future. Good advice I’ve always found. You’ve done your finances and can afford it. Ok, mortgage needs to be increased again at the moment but that doesn’t need to be forever. You can always bring it down again when you renew in 5 years (keep payments the same/ knock off a couple of years).
Be brave and go for it!

If you took the mortgage for a longer term
You could re visit in a few years.

I had a friend who upsized and then regretted not being able to afford any kind of holiday for years. Now 20 years on its all good and the mortgage was paid off about 3 years ago. Both my friends have very good final salary pensions,

I would go garden room personally. I haven’t moved for 20 years but remember costs being a few thousand though DH got a relocation package so we didn’t pay anything. Have you factored this in? In these uncertain times I would not move.

I’m in a similar situation OP and would say go for the bigger property. As you say, you’ve maxed out the space in your current one anyway. I’m not worried about interest rates rising for a while but would probably go for a fixed rate over a longer term. The properties we are looking at are larger than our current ones(selling 2 houses) but our monthly mortgage payment would only increase slightly because the rates are really low at the moment and we have healthy deposits. We also have teens so space is a priority and also facing the university issue.

Thanks everyone for all your input, you've given me a lot to think about. I guess first thing is to see it! But interesting about being brave - we didn't think we could afford this place when we bought it, but it's doubled in value in 13 years and we are so glad we bought when we did. The new place isn't massive, just better thought out. Our current house would prob be desirable as we are opposite outstanding school, big garden and are prob just at the top of budget for families who were looking at 3, but could consider 4 bed with no stamp duty

A few months ago I would have said go for it. We moved just before lockdown and I wondered whether we should have taken a larger mortgage. Fast forward to lockdown, dh had a 20% pay reduction and suddenly the mortgage that had felt very reasonable felt tight. It really focused my mind on what a larger mortgage would have meant. We’re in uncertain times. I’m not sure I’d want to go near my limit.