House purchase - WWYD

[Animallover87]

Myself and Fiancee getting married next month. Planning on each selling our flats and buying a house together. I love going on holiday/eating out regularly and would like to hopefully have a baby soon so I think we should buy something quite modest and still have plenty of disposable income. Also I would like the freedom to go part time after baby. DFiancee thinks we should stretch ourselves to the max to get the best house we can as it's an investment for the future and will be worth it as we could get a nice house with lots of space. I just worry about having to worry about money and that I might resent the lack of freedom it will bring. The more we buy the more tied to work we are! AIBU to want to live well below our means so we can enjoy more of life?

I personally think anyone who stretches them selves to the max for a house is absurd.

Where possible you should be looking at being able to cover the running costs inc. mortgage on just one salary.

I don't think any sensible lender would allow anyone to max themselves now.

I say where possible because I know I live in a low-cost housing area, 220k here would buy you a lovely 3 bed, with a nice garden.

I agree with a Pp about looking at the plot.

Since buying ours our entire lifestyle changed. We both took new jobs working from home. Having a big garden with a garage meant we converted the garage into a home office. Makes a world of difference.

I would allow yourselves a contingency for interest rate hikes. What ever the mortgage repayment is, double it and make sure that’s still affordable. Especially if you are going to have a child as the first few years can be very expensive in terms of nursery (ours is more than our mortgage!). Also, I would look at schools, something we didn’t really consider when we moved!

You hit the nail on the head.

Firstly a mortgage (death grip) ties you to earning enough to cover it, or your home is repossessed. The liability is huge, often lifelong, and on purpose, so you cannot quit work, ever.

Secondly, living below your means is wise if you ever wish to become wealthy. If you have extra money to invest you could eradicate the need to work at all.

Your partner is being very short-sighted. Introduce him to Robert Kyasaki, Rich Dad, Poor Dad. It could transform him. He is living how we are told, not what is smart.

Thank you, this is helpful!

OP,

I would be careful.
He wants a larger house for a studio?
Not a good enough reason.

He wants to have you living a quiet life because of his studio?

What about if you have a child and interest rates are higher and you are stuck without any flexibility with your job.

Not a chance would I be committing to beyond my means for the reasons you have stated.

Does he really want a child?
Sounds like his hobby is a priority.

I am on your side OP. Given that you have the most expensive years ahead of you with reduced pay during and after maternity leave, combined with nursery fees and increased living expenses I think it would be foolish to stretch yourselves now. It’s no fun living with financial worries in a big house, I’d much rather have money in the bank and be able to work a little less.

This is EXACTLY how I feel.

In his current flat (from when before we met) an entire room is dedicated to his art supplies. It feels unfair to ask him to get rid of this when it's his only hobby. He definitely wants a child and his art doesn't take over our time together or anything. He does it in his free time to relax but always puts me first.

You may have twins, who knows

I came on here for a range of opinions, but it's nice to be agreed with! 😛

I think you need to compromise. He wants a studio, you'd like to go part time. CoL increases and BoE raises are scary, but moving more than you need because you've underestimated how much space you need is expensive.

We've moved twice in the last 5 years, then had a delightful surprise baby and have just finished extending purchase number two. Ultimately worth it, but two lots of fees, stamp duty and everything else even before extending was eye watering.

One room for his art studio and he plans to continue with his art in his free time? After the baby is born and he's still working full time to pay for the bigger house, when is he anticipating having all this free time? If he doesn't do his share of child care at evenings and weekends, you'll end up doing it all...I would definitely say go for the modest house, leave yourselves some financial breathing space and one or both of you reduce your working hours to spend time with your child. I never regretted going part time after my first child was born. It meant we didn't have as much money coming in as we might have, but so what? We had enough and I valued the time with my children more. I appreciate that not everyone can afford to make that decision, but if you can, grab the opportunity with both hands!

Yes. I think it's important that we get somewhere that we could see ourselves long term. Neither of us want a stepping stone house.

Why don't you start living like you're on part time earnings plus maxed out on a mortgage now - and put everything you'd be losing or spending into a savings account? Then you'll get an idea of how comfortable or uncomfortable you'll be.

I actually think there is a really good mid point for you and your DH.

You just need to sit down and go through the numbers.

Agree that it’s worth stretching yourself . Multiple moves are expensive. I would stretch yourselves if you can. In reality you won’t be eating out much with a young child - but you might want to work less.

You're both estimable reasonable, it's just about choices.

We decided to get a decent house that needed renovation, so we didn't have the mortgage issue when just about to get pregnant (planned and lucky) but with the ability to improve the property as our own pace for expenses. The leap from our house price to the next size bracket is much larger than yours because it's two steps between what we bought and what we ended up with renovated. The decision about buying even larger was a lot easier, because we would have had such significant additional costs that it would have prevented me from having much maternity leave. I haven't regretted the extra time off.

I would work on a compromise between you; e.g. look for a property you can expand; large garden for a future extension / garden office, or suitable for loft conversion. It's also useful to consider what shape of house will work best for you specifically; some like everything open plan but you might prefer properties with a garage he could convert for use (put velux windows in the roof for light), or an extra reception room downstairs, or one of those attics that isn't tall enough for an official bedroom but great for a studio. Ideally, you'd get more space for your money when there are features you can use that aren't worth quite as much to someone without a plan for how to use quirky space.

It’s really important to factor in the costs of buying and selling once you outgrow your smaller property. It can be huge. Also, the percentage difference in price makes it harder to go up the ladder in future. I would definitely go for the ‘family, long term house’ as soon as possible. Cheaper in the long run.

He's hardly wanting to push yourselves to the limit. Even with zero deposit (which wouldn't happen) your mortgage would be less than 4x your salaries. So by the time you account for the equity from your current places you will have a very modest mortgage. More than enough for you to take some time away from work to have a child. Particularly as you say you are only having one.

We bought a smaller house a few years ago as we knew we'd be paying an extra mortgage in childcare and we could buy bigger once that was over. Most people only stay in their first house 5 years or so and it minimises the stamp duty wasted when you upgrade. I do occasionally get pangs of what if but equally well our lives are much less stressful with a smaller house and more disposable income. Can you actually even afford childcare of maybe £1000 a month with a £300k house?

Have you looked at stamp duty? Its outrageous. But now, max out, get a long fixed mortgage and thank yourselves in the future. Part time is a trap too. It is worse than you think.

This logic does not work on two fairly low salaries with a plan to have a baby.

Look at a full time childcare place round you, and factor paying that plus all current expenses. See what that looks like on current salaries.

We did your preference (in a cheap part of the uk) at the top of the housing market in 2007. It's done us very nicely (as in property wise, currently trying to sell for 25k more than we bought it for) and made decisions like me taking a massive pay cut possible.

I dont fancy the life we would have had if we'd borrowed what the bank was offering.

Not without having to survive on beans and toast. This is what concerns me. I'm used to having plenty of disposable income to spend on days out etc.

Not sure what bit you're referring to?