To double our mortgage at 36?

[EponymousEponine]

We (DH and I, both 36) bought our 5 bed 2 bathroom home 7 years ago as a project for £267k. We've since done a lot of work, remortgaged and currently owe £221k, with 33 years remaining on our mortgage. The house is worth £400k and our current interest rate is quite high as we have had some financial struggles in the past which limited our lenders. We pay £1250/month. Aside from electrics & plumbing I've done the majority of the work myself.

Our home is great but has room for more improvement if it's to be our forever home. We have 3 DC (8 and under), two of whom may live at home longer than usual due to additional needs. We're located less than 10 mins from my Dad at the moment, and the same distance from DC's school (and also the high school theyre likely to go to). The area is OK, its not the nicest but our street is safe and its more affordable than where my Dad lives, hence why we could afford a good sized house for a decent price. But there is a ceiling on the value. My biggest issue is the small garden we have, which was the only compromise when we bought it.

Another house has caught my eye. Its another project- on a bigger scale than our current home, but its in a frankly amazing area where most properties are £800k+. It's currently listed for £525k but isn't selling - it would require a lot of work which may put a lot of people off, but the potential is huge. Its got such gorgeous original features and is double fronted which is my dream. It also comes with an acre of land, a mixture of a large garden, small wooded area and open field. DH and I viewed it and I fell in love, but the catch is that its 40 minutes away from where we are now and would be a similar length drive to my Dad & DC's schools.

I'm completely torn. In theory we could sell our house, put down a 10% deposit (ideally pay 450k-500k max), leaving us £100k for immediate works to get it liveable & we'd then either do the rest ourselves or refinance. It would take about £200k to get it completely done to a nice spec, but then it would easily be worth £1m+. Obviously we'd be saddling ourselves with £400k+ of debt at 36, but the repayments wouldn't be too much more than what we're paying now due to us being more likely to get a better interest rate now. And we'd end up with a beautiful home which would be more likely to rise in value over time due to its location (very rural, no neighbours, adjacent to coveted Yorkshire village). The outdoor space would give us the opportunity to have a mini smallholding with a couple of goats, ducks and some chickens - always a dream of mine (and DD would love this too)

DH earns £85k/yr (a fairly recent development due to career progression), I earn £22k/yr part time (which is needed so I can accommodate our 2 children with additional needs, 1 of which doesn't attend school full time). It feels like a heart vs head choice. Staying is the head option - if we stay here we'd probably spend £50k on an extension to give us a better configuration, additional bathroom, utility room, downstairs wc. But overall mortgage debt would be half so better chance of repaying it/retiring early etc. But my heart is telling me to go for the beautiful dream location which would provide better long term financial growth with short-medium term inconvenience due being 40min away.. DH is happy whatever I decide.

Help please! My late mum would be my sounding board and since she died I'm without someone to talk this over with. AIBU to move to the big project house? YABU = stay put, YANBU = move

I got divorced at 36 and bought my current place at 38, with a bigger mortgage than we had on the marital home but paying it solo so effectively more than doubled. But that was a tiny mortgage compared to yours.

CAN you afford it, for your forever home?

This all makes sense, why move if your current house is more convenient in every way? There's no guarantee than you'd make as much money on a new house as you hope, particularly with the housing market as it is now. You could be stuck with a house worth less than you'd hoped in new area, no profit and no real advantages over your current perfectly nice house.
Your DH has a decent salary, your DC are settled, you are near your DF - why not just enjoy all this and perhaps finish paying your mortgage a little earlier than you expected. Or put extra into your pension(s) so that you have a better retirement.

@EponymousEponine

Wouldn't it be sensible to wait to see what happens with the budget?

I mean sounds interesting on paper but can you actually afford to live in it long term if the property tax is applied? Bills keep going up not down.

I suspect you may regret it long term and wish you were in a more manageable property in the long run.

Don't fall into the aspirational trap of forever home. Think about a forever lifestyle instead, free of stress and worry.

For me, it’s not so much the cash (although that level of debt would worry me), but more your daughter, who might love being rural with goats and stuff now, but as a teen, she’ll likely to want to be able to go out with her friends without relying on you for lifts all the time. The house sounds idyllic though OP!

Agree. If it's 40 mins each way twice a day and it's currently 10 each way, you'll be spending 2 ADDITIONAL hours a day on the school run.

Yes, very few real develpment opportunities now. We're also seasoned renovators but, realistically, even if your DH has a well paid full-time job you need to be careful what you take on. There are usually unexpected costs in renovations and you often spend more on upgrading kitchens, bathrooms and floors than you intended to do. If there were to be a sudden drop in your household income for any reason you could have serious problems with a bigger mortgage on a part-renovated home.

We renovated whilst doing full-time jobs and it was pretty tough, but the houses were large enough to enable us to live there whilst we took our time doing the work in different parts of the building. We had relatively small mortgages, with a really good profit at the end of it. I'm not convinced that the current housing market and potential new goverment tax regimes mean that this would be possible now.

We're also older and no longer doing renovations, in fact we sub-contracted the work to tradesmen for much of the last two that we undertook. My DH (a civil engineer) did manage all the work though.

A couple of points.
Have you considered the extra bills? Council tax is most likely going up and energy /maintenance on an old property can be really high.
I was listening to a programme today where the commentators were saying the prospect of price drops in the housing market are a very real possibility at the moment. We will probably know more after the budget next week.
The house sounds great and the distance wouldn’t bother me. Just make sure the sums really do work.

A couple of points.
Have you considered the extra bills? Council tax is most likely going up and energy /maintenance on an old property can be really high.
I was listening to a programme today where the commentators were saying the prospect of price drops in the housing market are a very real possibility at the moment. We will probably know more after the budget next week.
The house sounds great and the distance wouldn’t bother me. Just make sure the sums really do work.

I’m sure the house is beautiful but why are you even looking at houses in an unsuitable area? That school run will kill you.
You will be massively complicating your life when there is no need. Your children’s needs may get more expensive, kids get more expensive as they grow. With three children, especially two with special needs, you have a lot of moving parts in your life and have to keep things as simple as you can. I don’t think it is a good idea to take such a risk and gamble just because you “like a project”.

I just want to say thank you to everyone who's commented its so helpful to have all your thoughts, especially when DH is so passive!

I so need to see the house - it sounds fab

On the one hand, you only live once, if you can genuinely achieve the small holding and renovation you plan, and the family is truly keen, then I’d say yes.

Do be mindful though that your kids will loose independence as teenagers if there’s no public transport for them: clubs, sports, jobs, friendships etc will all be much harder if they can’t take themselves. See if you can problem solve that first.

Are there closer schools? The almost three hours driving a day would be really difficult…

Well, @EponymousEponine I came to say you shouldn't do it. Then I read all your figures, what the house is like, etc, & I was going to say go for it!

I've now read all four pages & I DON'T KNOW!!
I can only say I'm glad it's your decision & not mine! Hugs!

Its a no from me.

1. The more you have in asset value the more you'll be taxed which is money out of your kids inheritance (which seems important to you)
2. You're swapping one set of problems for another and its a lot to spend on something that will make life harder.
3. Are many houses are reduced or struggling to sell locally? I've absolutely noticed a number of nice enough homes stuck on the market so I'd personally be worried about making such an expensive move right now.

I think I’ve found the house - painted white, with a big river at the bottom of the garden?

If so…gulp, that’s a lot of work. And has some very close neighbouring buildings which looks like possibly a commercial premises?

Our household income is more than double yours and our remaining mortgage similar with more equity and low interest rates but oddly we pay more a month than you say you do! Personally I would not want to stretch much more in my position let alone yours. But then our focus has been on large pension investments to reduce tax liability instead and I am also mindful that the property market could change as could our health/work so want to ensure we are very comfortably able to pay the mortgage

I would hate have to drive for over two hours a day for school. It also means that you’ll be far away from all their friends (when they’re older and socialising after school). You could be doing that journey more than twice a day sometimes.

We have always been walking distance to school so that would be an instant no for me.
I appreciate we are all different though.

My one regret in life is that I didn't push myself financially with property when young. I could have afforded to double tge mortgage but didn't. If I had I would be in a different ball park now in terms of assets.
I'd go for it

My one regret in life is that I didn't push myself financially with property when young. I could have afforded to double tge mortgage but didn't. If I had I would be in a different ball park now in terms of assets.
I'd go for it

I'd prioritize location, easy acces (childcare, school, healthcare) and factor in that your children's support needs (especially with two having a diagnosis) may fluctuate over time, especially around puberty.

Will the dream home be such a winner when you need to drive hours to school?
Are there better schools nearer to the new house?

I was moved to a rural location when I was 15 and I hated it! It messed me up a bit mentally at the time. Living in the back of beyond isn't for everyone and not necessarily a fair thing to force on kids who become trapped out there and ultimately lose the friends they grew up with. It's quite a selfish act and it's not something I've ever forgiven my parents for. Try having those commutes when it's exam time! I missed a GCSE exam because the bus was running late and my dad could only take me as far as his work and that was probably a 30 mile journey before I had to catch a bus to go about 10 mile to where my school was!

It sounds like the house needs a serious amount of work and you both full time so it won't be fun to live in for a very long by the time you've turned it into a nicely decorated home. If there is a problem with flooding, you'll not easily sell it in the future.

You need to think about days when you've got a car that's broke down or needs to go in for an MOT etc.

Like others have said, you need to be careful about relying so heavily on your partner's income and financing yourselves silly on it just in case something does happen.

Think about it either of you lost your jobs, where are you going to end up having to commute to for alternative work! The roads are crap these days and commutes take far longer than they used to plus you might have to deal with a lot of dark treacherous roads in the winter to get to and from your rural house

Where does all the time come from not only to renovate the home but to also have this small holding of animals that you talk about? You are going to work all day take ages getting home with the kids each night and then have animals to sort out? Let alone making the house liveable?

Thing is, my mum and dad were exactly like thls! They moved to the sticks, got horses, goats, hens! My dad was still working like a dog at his business 30 miles away. It just didn't work, after five years they packed it all in and went back to the area they moved from and by this point I had my own home in the county they moved me to so I never lived any closer than 36 miles from my parents. Dad died 9 years ago, he worked himself into an early grave and mum lives alone 36 miles away.

Is there a chance you will have a chunk of money at some point to pay off the mortgage? Inheritance or anything? Or will you be saddled with a mortgage until 70 either way?

You are living frugally at the moment and you want to double your mortgage , my worry would be if you became ill or your husband , or either of you lost your jobs ? Could you still keep the new house or would it be unsellable . Your dad has dementia and you will have more demands put in you in the future and will be further away
I think I would rather enjoy my present home and have the chance of nice holidays and treats whilst the kids are young to be honest . Enjoy the now !