AIBU to want a bigger house? Please help me. Stay or Go?

[MrsWolfyWoo]

We live in a small 2 bed . Me , dh and Ds. We are lucky it is affordable and absolutely love the house and location but it’s very small especially as I work from home . We want another baby so space will be tighter .

The thing is - DH is older . So if we are going to move - we have to do it now while we can get a 17 year mortgage together . The issue is a 17 year mortgage on a bigger house will mean out mortgage payment will double our current payments . Things will be much tighter and the price of living is going up . This worries me especially if I want to have another baby ( maternity pay is low - then nursery fees)

If we don’t move I’m worried that we will become stuck in a 2 bed as if I was to borrow alone I can only borrow about £100k . Which would not be enough for us to get a bigger house even with the equity we have .

Do we stay and know we are comfortable but always worry that we may not get a 3 bed . Or do we move now whilst we can and accept things will be tight for at least 5 years ?

There is no room for an extension !

Advice please ?

@MrsWolfyWoo Then sorry, but on that income I don't think it's affordable. Would you consider moving to a less good area to try to reduce the costs?

today I have really considered a house which isn’t all done and needs work
ans we could modernise . Meaning we could borrow less so it would cost about £ 1,100 a month

But you wont have much money to pay to do it up unless you diy

Absolutely no way, you can’t afford it right now. I’m sorry and hope you come up with a solution. All the best.

Sounds on paper it isn’t going to work and you won’t be able to have everything.

what about moving to a cheaper area?? That might give you everything?

I think if you move without the possibility of increasing your salary, then I suspect you will end up financially crippled and deeply regret it.

what happens to that £1100 or £1400 mortgage when rates go to 6 or 7%.

I would stay where you are, no questions. Then either have or not have the second child. Then if the second child came and it was unliveable, then I’d move to a cheaper area.

Thanks again everyone for the replies . Lots to consider .
@OooErr i suppose I am worried about being stuck as I think I am the one who will have to get a high paying job ( stressful ) job to earn enough to try and get the mortgage alone as I’ll need to prove I’m earning a high salary each month . But then once have the mortgage I could always change jobs .

I don’t know why I’m so worried ? Think the housing market seems to be moving so fast and I’m scared if we don’t move with it we will never be able to afford a 3 bed ! I am a worry pot!!!

@OhmygodDont i have thought about a 2 bed with potential to extended . Think I’m going to revisit this !

@Thehonestbadger thank you for sharing . Yes I’m worried that all these little costs will add up and we will really feel the pinch !

thanks all for the input . I need to do a spreadsheet . Be completely realistic . Then speak to the mortgage advisor and see if we can afford to move and if so what our budget is so we aren’t stretched . If we can’t afford it - I may as well get on with trying for the second baby !!!

Can you do the loft? My friend did theirs and it's doubled their house! You could create an office upstairs, plus a big bedroom, bathroom...

It's not that spendy, either.

I don’t think you can afford it. When I read the mortgage payment and your income I must confess I was shocked.

For what it’s worth I am stuck in a two bed with two children and it’s horrendous but it’s also lovely having lots of financial stability and plenty left over after bills.

I think things are too uncertain at the moment to do anything that even in normal times would be considered a bit risky. Who knows what interest rates will be in 5 years time when you need to renew the mortgage.

I can see why you feel you have to move, but really work the money out - you do not want to have to sell, or be stretched to hell for a decade.

work out a spreadsheet, work out that you can cover costs if mortgage and bills go up.

As you have more time to build a career you may want to focus more on that and have DH do more at home, if you don’t already

What a sensible post. Realism doesnt hit home for some until you put it down in black & white.

But then once have the mortgage I could always change jobs

Except a fresh affordability calculation is made every time you renew or fix another mortgage deal. Or you could do a long-term or lifetime fox, but the APR may be less competitive.

@Thehonestbadger yep - by the time I save monthly for one off annual expenses that’s another £400+ per month. Add that to a high mortgage payment and that’s scary.

@Thehonestbadger off-topic but have you considered LibreOffice suite? It's free, not as smooth as Microsoft Office but it does well for household stuff. There's also Google sheets etc but I find that a pain.

@MrsWolfyWoo completely understand. Life seems very uncertain. We constantly read about house prices rising, people being priced out etc etc it all seems very scary.

The important thing to remember though is that your current property is somewhat of a hedge - it'll follow 'general' house prices in the area. So you won't need a very high LTV in the first place.
The other consideration is if you can build a very good cash buffer. That extra £700 you would have spent on the mortgage, save it every month. In a year you have £8400, in 3 years that's £25200!
When house prices drop you'll be in a good position to take advantage (I know people have been saying this for ages and it's never happened but with rising interest rates it's inevitable).

The 'pricing out' occurs because people rely 100% on their equity for the next step up, and find that equity alone + low salaries isn't enough. But if you can save more money you'll be in a better position.

Can you move to another part of the country? Things are much cheaper up north. You have to decide which you want most;

bigger home
another child
to manage on your money

and which you want least

living in a small home with another child
living in a big home but with serious money worries

which is worse?

We are in the same boat but I refuse to get a mortgage in this current climate. I've never wanted a mortgage personally but right now no way. I'll see where this crash goes.

I'd be very wary of being under a huge obligation to a bank where they could take my home from me and while our currency is flagging so badly and things are going up almost at a rate of hyperinflation.

We moved in similar circumstances. Loved loved loved our two bed house. Great location and neighbours. But we already had a second child and there literally wasn't room to move. No room to extend up or out and the lack of back garden was also a pain. It was starting to get stressful. We were lucky as we moved five years ago so got in when prices were still low ish and bought a three bedroom semi fixer upper. We bought the worst house in the best neighbourhood we could afford. It was tough for a bit but we so delighted now that we did it.

Obviously depends how "tight", but I would move. Is there so middle ground (somewhere bigger but in a cheaper area for example)?

It all depends on your family finances and how comfortably you think you would manage the added expense. When we bought our house with a view to having a baby, we were torn between our smaller house and a significantly bigger place at the top end of our budget. Long story short, I ended up having twins. So trying to juggle maternity pay with the costs associated with having two little ones in the current economic climate has meant things have been extremely difficult financially, even in our previously below budget choice of house. I’m sure the stress of living in a slightly smaller space than we’d prefer for a family of four has been significantly less than the stress of not knowing if we could continue to pay our mortgage in our current circumstances. However, it’s all relative and only you will know if it’s affordable or sustainable longer term.

Do it as soon as you can.

We've moved from a three bed to a four in the last six months, and the relaxation that having a bit of extra space brings cannot be overstated. We also moved from a house with no garden to a house with garden and garage, and it’s amazing.

I think a mortgage of that size on your salaries would be tight.

ours is £1500 and we take home about £5.5k and we are FINE but not loads of give.

My concern would be interest rate rises. The interest rate will only go up in the short to medium term so your mortgage could go from just manageable to unaffordable in a few years.

Are you in a good catchment for primary schools? Does it change for secondary?

I think I'd plan to stay until second DC is about four. Get the expensive child care years out of the way and move before the next expensive teenage stage kicks in.

How big is your main bedroom? If you can fit in a cot/toddler bed then that might be okay for a few years

In the meantime, I'd either save the difference in mortgage costs or depending on your interest rate overpay as much as possible on your current mortgage to build equity.

While there's no knowing what house prices will do, I think by the time you get on the market they will have peaked. You've missed the upward curve and missed the decent fixed rates on mortgages that might offset paying a premium.
I don't expect a massive crash but I think they'll stabilise and dip in the short term in the places where things were going way over valuation.

I'd also imagine stock will be limited for you to choose from as there will be a lot of people staying put now

@BammBamm you may know this already, but if your mortgage finishes in January you can probably apply for a new one now, to lock in the rate. Likely higher than what you pay now, but cheaper than what will be available later in the year. May be worth considering?

Thanks @ApplesandBunions I've just started considering this. I've stuck with my bank since 2012 because it's been easier and only very slightly more than the best buys but I think I'll have to reconsider in the current climate!

Yeah, unless they are really competitive or the customer service is completely stunningly great then I don't think there's any room for brand loyalty in the current climate.

It's not affordable. Childcare is bloody expensive and even another £500 on your mortgage plus the cost of renovations in the current climate is not good idea. I earn the same as you, my kids are not in childcare and my mortgage is only £600. There is no way I would consider doubling it now. Quite apart form from the risk that you lose your income or your expenses rise to the point that your house becomes unaffordable, you won't have anything spare in the system for all the little things that make life nice, for you and your dcs

Id get a loft conversion and extention if you can.