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Original poster

Did you stretch to buy and regret it?

30 replies

Misty9 · 08/06/2013 16:07

We've seen a grand total of three houses so far - and absolutely love the first one we saw. It's our dream house in fantastic location. But, and it's a big one, it's the very top end of our budget - and the stamp duty is eye watering over the £250k threshold.

We could stretch to it, but if interest rates go up massively it would be a struggle... It's pretty much done - and beautifully at that - and we could just move straight in (neither of us are DIY savvy in the remotest) but can't see how much more value could be added if the market slumps.

Has anyone stretched to get 'the one' - and did you regret it? Or, have people not done so and always wondered about the one that got away?

We haven't even offered yet and it's stressful!

OP posts:

Bowlersarm · 08/06/2013 16:15

It's what you've said about the interest rates going up which would worry me in your situation.

Fwiw, I don't think they'll be going up any time soon but when they do start going up they may climb quickly.

If you bought it, would you also be able to save money over the next few years or would you have nothing left out of your living expenses to save?

formica5 · 08/06/2013 16:31

Its been a stretch every time we have bought. We have added value though (houses needed work), so the return has been amazing in the long term. I am quite attracted to buying a house that is finished though, you won't need to find extra money to make the house livable. If you see the house as long term, is there any way in having a 5 year set mortgage so at least you can budget? Also make sure you have a cushion of three months pay. I say that but we don't have a cushion ourselves. Just equity.

ItsYonliMe · 08/06/2013 16:36

Interest rates are bound to go up. I remember when they were about 15%. I wouldn't do it in your circumstances. (The "slump"/crash is well overdue and it will be a belter when it happens)

LaurieFairyCake · 08/06/2013 16:41

Yes, done it every time and never regretted.

It depends very much on where it is - yes to the area I'm in (south east) as its continuously climbing.

For a house in good condition, that you can afford, that you can live in for a long time - definitely.

Salbertina · 08/06/2013 16:47

Yes and yes as v v v top of the market but how could we have known?!

BackforGood · 08/06/2013 16:48

Also depends on your career prospects (and those of whoever else is contributing).
I was able to borrow more than 'standard' with my first mortgage, as I could show them evidence that my salary would go up, each year for the next however many years. I didn't tell the mortgage company this at the time, but I was also planning to let out the other bedroom, so I would be only having to find a small bit of the mortgage. If, however, you are comtemplating going on maternity leave, or taking early retirement, or going PT or taking a sabatical, then you wouldn't want to be stretching yourself.
When you do 'go up the ladder' though, it is always scary, and seems like a huge amount of money to be borrowing, but, if it's the house for you, then it's worth that 'leap' IME.

lljkk · 08/06/2013 16:52

Didn't stretch to buy & regret it, lol. But we were playing very very safe. Sounds like OP is already right up at limits.

Mandy21 · 08/06/2013 17:26

We didn't the 1st time we bought (in 2002) and regret it - although the house doubled in price, had we stretched ourselves to find a little bit extra, the reward would have been more.

We did this time - the house cost every penny we had as a deposit, and we borrowed the maximum we could on our salaries. The repayments are high, but we knew that we'd have an increase in income 3 years down the line (no more nursery fees and potentially increased salary). We're 1 month away from the end of that 3 years. It has been a struggle, we've had holidays etc but budget ones, need a new car, haven't been able to do anything to the house (and ours needs it), have scrimped and saved for clothes / Christmas etc. Some unexpected expenses have meant that we had to take out a loan last year to tide us over, we're overdrawn, have no savings etc. BUT, I would still do it again because there was very little that ticked all of our boxes in the price range we had, and prices have held / going up in this area, and we knew it would be a struggle for a limited time.

So, I would if there was potential to increase your income / reduce the mortgage payment at some point. I wouldn't do it if you're looking at it being a stretch for the entire term of the mortgage.

passthecheese · 08/06/2013 17:34

We stretched to buy our house in 1999, we paid £175k for a 4 bed semi in nw London. It's been worth it as we didn't need to move as our family increased, obviously house has increased in value too but we didn't expect that at the time.

middleagedspread · 08/06/2013 18:24

1st property late 80's.
Interest rates went up & up, we struggled for over a year to pay the mortgage & were in negative equity for 3.
Fingers burned, never again.

BimbaBirba · 08/06/2013 18:32

Didn't stretch in 2007 and the houses that we could have bought at £300,000 are now around £450,000 (whereas our house in a not so cool location and in a modern estate has stayed the same). So yes, definitely regretted not stretching at the time.

HaveToWearHeels · 08/06/2013 18:37

We stretched and don't regret it a bit. We bought in August 2007 so just before the banking crisis, and out house has still increased in value. We are in our forever home though.

Lavenderandroses · 08/06/2013 18:46

There is stretching and really stretching. Clearly the interest rates will go up, the question is when. I predict in 5 years or so?

You really shouldn't stretch yourselves if it means you cant afford your mortgage when the rates do increase. It's people borrowing beyond their means that caused this housing mess.

doglover · 08/06/2013 19:01

We regret it. Buying when the dds were younger (and cheaper) has left us struggling now. This is part of the reason that we're downsizing to our forever bungalow.

Original poster

Misty9 · 08/06/2013 19:51

Thanks for all the responses. Lots to think about.

To answer some of the points raised:
We live off one income currently, and my future income will be good albeit public sector so not exactly guaranteed to rise!
We've been approved to borrow double what we would need to for this house (but would never borrow that much anyway) based on dh's contract rates, so although its a stretch in terms of what we'd set ourselves, it's definitely affordable.
We would plan to live in it for a long time, and there are a few little bits we could do to make it even better.

Yes, we do have (currently more than) three months outgoings saved as a cushion, and with dh being SE we won't be touching that.

We're going for second viewing tomorrow but I think we've decided to offer on it and we both keep smiling at the thought of living there.

Bloody boiler has packed in today...I hate renting! yes I know in our own house we'd have to foot the bill, but we'd install a decent boiler in the first place!

OP posts:

BimbaBirba · 08/06/2013 19:56

Good luck!
If you'll have a second income by the time interest rates go up, then it's a no brainier IMO

Original poster

Misty9 · 08/06/2013 19:58

Yeeees, but possibly another mat leave too though the plan would be for me to be working in two years I think, after baby2 (and we can get a two year fix mortgage deal)

OP posts:

HaveToWearHeels · 08/06/2013 20:16

after your second post I would go for it.

crazyhead · 08/06/2013 20:27

I think you are right to stretch. You can get a long term fixed rate mortgage and then you'll be back working by the time the fix has expired.

Chunkamatic · 08/06/2013 22:15

We stretched ourselves for our place now. At the time we thought we could manage as it would be fairly short term that I was not working (relocated after 2nd mat leave so I didn't return to work).

For us it didn't work. We have found it hard to have one wage and a high mortgage. It means that we have no holidays, activities for the kids have to be very limited etc, DH works a LOT of overtime and it just feels like there's not a lot of quality of life. It was also hard having a lovely house but not really having the money we wanted to spend doing it up.

Of course I could have gone back to work, but with 2 young DCs and no family support and not having a great earning potential in the first place, that is easier than it sounds.

We decided to sell up and relocate, which we are in the process of doing. Feel very excited but do not regret the few years we've struggled here as its helped us focus our priorities massively.

Your situation is obviously different as you are in work, but I just wanted to offer our experience.

noisytoys · 09/06/2013 07:24

We didn't stretch ourselves and bought a flat for £100k instead of a small house for £130k in 2008. The flat is still worth £100k, the house has just been sold for £160k :(

Themobstersknife · 09/06/2013 07:34

Pretty much the same as Mandy21 but we are earlier on in the journey. Childcare costs currently at their peak for us and another two years before they will go down significantly. I have just finished mat leave and things have been a struggle but I don't regret it. We are interest only but have sharesaves which we will use to pay a chunk off the mortgage when we renew. Makes me nervous but our house is ace.

soverylucky · 09/06/2013 17:36

This reply has been deleted

Message withdrawn at poster's request.

Turnipinatutu · 09/06/2013 21:16

We are currently thinking of stretching ourselves too.
Bank have offered to lend enough for us to afford up to 600k. We were, at first, thinking our comfortable price would be 450k, but there's nothing decent available in our area for that amount.
As a result we're thinking of stretching to a spend of 500k.

The big question is obviously that of interest rate rises, which we all know will happen, but don't when or by how much.
However, both our incomes should increase slightly and we could make economies. Cheap holidays, smaller, cheaper car etc... And in a worse case scenario, could go interest only, if necessary.

When we moved to our current house, things were tight, but 18years, were comfortable. However, that will make things harder to go back to being frugal again!

Mandy21 · 09/06/2013 21:22

soverylucky I don't think its necessarily what % of your income your mortgage is, not in our case anyway. Our mortgage is about 45% of our income, its the fact that we need every penny of the other 55% just to make ends meet at the moment. When nursery fees etc have stopped in a month, the mortgage will still be 45% of our income, but we won't be using £800+ a month on nursery and so that 55% that's left goes further (if that makes sense).

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