Buy now & compromise or wait?

[TiddleTaddleTat]

Looking for some advice.

We have sold our flat to a FTB with expected completion in December. It was previously rented out and we live in a rented house ourselves in a different area of the country. We pay £800pcm in rent and our bills are high due to poor insulation etc.

We now want to buy a house in the area we live.

After the proceeds of the sale and deducting fees and expected stamp duty on a purchase, we will have £218k in cash.
I have been advised we could easily get a mortgage of £60k at a decent rate (DH is low waged PT and I am in training).

After calculating fees etc in that scenario we'd be able to buy up to £265k with a mortgage.

We want to buy in the catchment for a good junior and secondary school.

The best available to us are:

1. Buy one of the mid terraces currently on the market now. Many are vacant and chain free. They are advertised £190-210k and needing various amounts of work, some extensive.

Pros - short walk to school, more square ft, Cons - small gardens, neighbours have rear access

1. Wait for an end terrace or particularly spacious mid terrace to come up and potentially buy with a small mortgage.

Pros - wait to find the 'perfect' house, less neighbour noise, potentially avoid neighbour rear access Cons - we are paying high rent in the meantime that we can't really afford for long, nothing may come up until next Spring

1. Try and get the highest mortgage possible (maybe £80k) and put an offer on a semi on at £290-300k

Pros - bigger house, better garden and worth more in future Cons - likely to go for far over asking price and out of our reach, will be financially stretched.

May be important to add that on qualification in 2-3 years my salary will be £30-40k.

Anyone?

In your shoes I’d call a free broker like London and country and get an application in principle to find out how much I could borrow exactly. Options 2&3 might not even be possible, get the aip and then you’ll know for sure what your options are and you’ll be better placed to make a decision.
If this is your forever home I’d go for option 3 if I could but the aip will let you know if you can go for that or if you have to wait until you’ve finished your studies. If it’s a stepping stone home then option 1 or two might be more sensible.

@BendAndLoft yes, we have spoken to London & Country and they have said £60k is a comfortable figure and we could go slightly higher but less likely.
Option 3 is wishful thinking perhaps...

Plus option 1 means being mortgage free which would be a great place to be...

1. Always 3.

Leaflet your chosen area. Someone may want to sell but is worried about the market or moving near Christmas but a guaranteed sale in January may be perfect

You could ask an estate agent to do a wanted ad

You have nothing to lose

@GreenTulips I might give that a go, thanks

Option 2 is the best, and wait for the Brexit discount.

You are right to avoid houses with rights of way behind them. Our rented house is like that. The kids couldn't play in the garden unsupervised when little because of the constant procession of randomers between the house and garden, some of whom seemed to have a problem with closing gates behind them.

Can dp go full time?

Work put your acceptable monthly repayments, and go from there

My 160k mortgage is around 800 a month

I would go for the biggest house I could comfortably afford. Small mortgage would be ok if as you say salary is going up in near future.
If buy a small house now, you could potentially be wanting to move again sooner rather than later and you will end up paying fees and stamp duty all over again.

@Tahani Mortgage wouldn't increase much if DP was full time; and its unworkable as he does pickups and is doing an evening class already to increase job prospects

Oddly, the semis priced at £290-300k actually often have lower internal square footage than the terraces that are almost £100k less. Obviously the semis have more external space but I'm not sure it's worth it?

While I would love to buy a 'forever home' now I don't think we are in a position to buy one. So I'm thinking of buying something we can comfortably afford with the potential to add lots of value is the best plan?

The semi tends to have garages and space above to extend with external space to extend as well

Depends on your requirements - we needed to be close to school and bus route for the kids when they are older and more independent - ditto the shops
We also wanted them to have a room each so we didn't have to move again.

We had to buy in a nice but not as nice area to do this

It works

@GreenTulips we could find a semi in our budget if we looked outside of the school catchment, but there is a clear social divide as well.
We are focusing on location and position first and foremost.
Interested in the replies here.. surprised that most would rather a large mortgage than mortgage free, even if both properties were a similar size.
Eg. We viewed a semi for £250k that was absolutely tiny and with no opportunity to extend.