Right house, wrong time - AIBU to push for it?

[Chisssweeze]

This is part AIBU part WWYD as I’m so so confused

current situation - we live in a small 3 bed terraced house, on a private road of 15 houses. We have lived here for 6 years. We live in a small but expensive Villiage. There is very little housing movement in the area, and when people do list their houses due to most having large amount of land are out of our budget (we don’t need 2 acres with a normal 4 bed house!)

On our street there is a mix of houses like ours, 5 bed large houses and 2 x 4 bed houses.

One of the owners of the 4 beds has messaged DH saying he is thinking of selling soon.

If this was 2 years in the future we’d look at making an offer if they put it on the market, but atm DD isn’t entitled to any funded hours at nursery and those fees are making things very tight (£1350 a month for 3 days!)

DH is in the no point making an offer camp. I however think that yes it would be a couple of years of hardship, but these houses will rarely be available for us, we love living in the Villiage, we love our neighbours and we can make it work. It would mean really cutting back on everything, possibly getting some money from my father but it’s doable.

AIBU to think that 2 years of suffering financially is worth it long term?

Would you need a new mortgage? Rates are currently very high - make sure you factor that in.

Are you certain that your plans on how to afford the new house will all work out? I’m not saying this to sound harsh or burst your bubble or anything, but from your post, it sounds like there’s a few variables that need to be firmed up to be able to afford the new house e.g. borrowing/being given money from your father.

@polkadotpeppermint thats part of DHd argument

we would need a bigger mortgage, our current rate is high (as we have just done a 2 year fixed in December last year) so my view is we are already paying out of our arses why not pay more

It’s not so much about whether you think you can afford more as whether your lender does. You’d need to investigate the feasibility of porting the mortgage and extra borrowing with them before thinking any further ahead.

@Acapulco12 the money from dad isn’t really a variable, it’s more whether we want to trade that chip in.

the move would take all our savings, eat into all our equity and we might need a little bit from dad to just cover moving costs (10-20k max) but it’s physically doable. It would just be really hard for a bit - current mortgage is £1850 a month and for the 4 bed it would be about £2350 based on our current rate

You need to find a good mortgage broker who will go through affordability etc, especially with things like nursery fees that high!
Clare Cook at Simply Mortgages and Life is very very good and has worked with us for our last few house purchases (she got us very very good rates!!)

How much more is the house, how much more per month would it cost and do you have savings to cover stamp duty and other moving costs.
These are the questions to need to ask yourself.

To be honest by the time it is actually up for sale - you'll probably be 6 months into your "2 years". Also they'll save a bit on a private sale so they should knock a bit off.

I'd do it.

@ComtesseDeSpair we’d be fine from that angle, it’s more from a comfort pov as it would be the most stretched we have ever been, it would take all our savings for example which is a hard pill for DH to swallow

Do you have the capacity to earn more? What's your current work position (both of you), and are you likely to progress in the short term, to increase your earnings?

Mortgage rates are coming down, which is a good thing. But there's a lot of volatility at the moment still.

However, if the only way you can afford this now is by borrowing money as well as taking on a bigger mortgage, I'd say 'no'.

I wouldn't. If you're already financially stretched it makes no sense to make that worse. 2 years is a short space of time but feels like a lifetime when you're in it and struggling. All it takes is one of you to lose their job or become ill and you might be in a very precarious position.

Personally I'd do it if you can afford the stamp duty fees etc.

It'll take 6 months or so for it all to go through, I'd also try and find ways to make a few cut backs so you have a small cushion after moving if it'll wipe your savings.

@NewYear24 we’ve done those sums. Hence the post. It’s physically doable. But it would be tight… we are used to a fair amount of disposable income and that would be no more.

It would take every penny of our savings, all our equity in our current home and due to the extra mortgage payments it would take longer to build those savings up. But imo this is our one shot at being able to stay in the place we love. We are already bursting at the seams, and the 4 beds on our street are the only viable options in the entire Villiage in terms of affordability

@BIWI it wouldn’t be borrowing money, dad would never ask for it back. It would just be a buffer in case we came £10k short

@FriendlyNeighbourhoodAccountant we aren’t currently stretched. That’s the issue we would go from a lot of disposable income to none for a couple of years at least

Have you worked out the figures if you were to extend the mortgage, you can always reduce it as your DC get older?

We always went for the next move even though we had no savings but I know this is approach isn’t for everyone. My thinking is you pay more but you’ll have a bigger asset. Obviously this has to be balanced with life style.
Do you think either your or your DH salaries will increase?

@NewYear24 DHs salary will unfortunately not be increasing any time soon (he works for the NHS and in his current role is now in a salary freeze for 5 years!)

for me it could increase, but I might need to leave my current role for that to happen, and I’ve been lucky in terms of flexibility at work since having DD so I’d not want to move even for more money for a couple of years at least (as it would impact childcare)

This sounds like madness. I wouldn’t, sorry.

So you’d be better off in a couple of years due to less childcare costs and not increased salaries? I think I’m those circumstances I wouldn’t push for the move. Could you do a major declutter of your current home?

@NewYear24 yes, and then even more better off a few years after that as I’d be more free to move role and DH would be out of his pay rise freeze.

we did a major declutter in November but it hasn’t really done much. We have toyed with an extension but it wouldn’t be a good financial decision as it wouldn’t add much value to the home and it wouldn’t fix all the areas we are struggling with.

I would ordinarily be in the wait camp, but I do understand when it genuinely is something that very, very rarely comes on the market.

Firstly, if you bought this house, would you have any reserves for emergencies? At an absolute minimum, stuff like car repairs or the washing machine breaking, but really also bigger things like one of you not being able to work for a few months or unexpectedly needing to replace a car/boiler/etc.? How secure are your jobs, what's your sick pay like, do you have any other assets that you could sell or use if you really, really had to?

Secondly, just how stretched would you be if you bought it, and do either of you have any experience living on that sort of budget? There's a huge difference between 'well, we'll need to be a bit careful with the food shop and only buy new clothes/shoes/etc. when we actually need them, and it'll mostly be weekend trips to the park with DD, but there should generally be enough for a monthly takeaway and a simple summer holiday' and 'we'll need to plan the food shop very carefully, definitely no holidays for the next two years, and let's plan on no new clothes/shoes for adults either. Both are doable, and you might consider both worth it for the house, but they're quite different lifestyles and one has much more margin for error than the other. Lots of people would (completely reasonably) be fine with putting themselves in the former position for a house, but not up for the latter.

When you said "paying out of our arses" for your current mortgage I assumed it was quite big and you'd be stretching.