Active discussions

Meet the Other Phone. Protection built in.

Meet the Other Phone.
Protection built in.

Buy now

Please or to access all these features

Talk
Property/DIY

Join our Property forum for renovation, DIY, and house selling advice.

Original poster

Buying at the top end of your budget

44 replies

Needmorecoffeeortea · 12/07/2019 20:25

Has anyone done this and regretted it? I’ve seen a house that might be perfect but it’s at the top top top end of our budget and very close to the maximum a bank would lend us.

OP posts:
MissyC90 · 12/07/2019 20:30

Did it and didnt regret it.
The absolute max the bank would lend us we litterally squeezed it to the last penny

And then took out a 10k loan to do up the kitchen and other renovations😐

Do you have any changes in finances due in the coming months/years
Our childcare costs have reduced since taking it out and we have both had pay rises but if id thought our costs were going to rise eg if we were planning on more children and had to factor in childcare or mat leave then it would be a different story

If im honest i would say get as big as your comfortable with and no more. If you think its too big a risk for you dont do it.

JoJoSM2 · 12/07/2019 20:33

I did it as a first time buyer. I was in my 20's and needed to borrow all I could get to buy sth lovely. I also expected for my career to progress and earnings to ncrease.

In your shoes, I'd have a think about how money coming in and out can change for you in the next few years. Another one is to consider the impact interest rates increasing eventually.

mumdone · 12/07/2019 20:34

I would absolutely.

user1471449295 · 12/07/2019 20:36

I have done in the past. It worked

Snowy111 · 12/07/2019 20:40

Don’t forget that interest rates have been extremely low for years now but that doesn’t mean they always will be. Will you be able to overpay? (We/I consistently overpaid by assuming a 5% interest rate, which could happen again, especially as no one knows what will happen to the economy if no deal). Also with all the house building, the market is gradually diluting, and house prices may drop some - could you cope with being in negative equity for a period? I’m a single parent and risk averse but that’s my tuppenethGrin

fatfluffycushion · 12/07/2019 21:06

Don't forget stamp duty , if it's expensive stamp duty will be high ( unless your a ftb)
Do all your sums and if you can manage go for it 🏡

Original poster
Needmorecoffeeortea · 12/07/2019 21:16

We can afford the stamp duty and legal fees and mortgage fees etc yes out of the equity of our current home. Our other costs are not likely to rise and one of us may get pay increases beyond inflationary type ones. The other one of us is stuck with minimal public sector increases. Our combined take home pay is around £4000 with fixed or planned bills/costs of around £1000 and food shop around £400. The mortgage on the potential home would be around £1200. So £1400 left over for other spending. The only essential not included in the payments above is fuel which is around £80 a month.

OP posts:
JoJoSM2 · 12/07/2019 22:15

Is it just the two of you?

Original poster
Needmorecoffeeortea · 12/07/2019 22:45

We also have a 6 year old.

OP posts:
WBWIFE · 12/07/2019 23:53

Go for itwe have just done it and took pout plots of equity to do the house upits our dream forever family home so in my opinion worth it

TiddleTaddleTat · 12/07/2019 23:55

Yes we have done the same and don't regret it yet... had a small amount of cash left to rewire and for new boiler but having to scrape cash together each month to redecorate ourselves . But lots of long term potential and so glad to be owners ...

Ivegotthree · 12/07/2019 23:59

Did it and glad we did. It's taken us years to save up enough to start doing it up but we are, finally, bit by bit.

TanMateix · 13/07/2019 00:02

I did, it required a lot of sacrifices in the first few years but it has been worth it as if I had waited another year to find a cheaper house I would have ended paying the same for something smaller or less attractive.

Having said that, in these times of Brexit uncertainty, I wouldn’t take the same risks.

Scholesfan · 13/07/2019 00:55

Currently going through this myself. I've found there's a massive difference in the quality of house we can get at the top end of our budget.

We're waiting to hear back if an offer we placed today is accepted or not.

senua · 13/07/2019 08:10

It's what everyone did when we were younger. That's how babyboomers got their nice houses - by being brave (otherwise known as 'foolhardy' if it went wrong and you got caught in negative equity).

Are we talking about 'asking price'? Can you negotiate down a bit to get a bit of leeway. Or increase the length of your mortgage.

zizu73 · 13/07/2019 08:41

We are just doing this but with slightly higher figures (London). Our mortgage payments would also be just under 30% of net take home. Still not sure we are doing the right thing given the Brexit uncertainty and the real risk of no deal Brexit. It's a long term home (10-15 yr), larger, in a better area (schools, transport, mix of people) so should hopefully give us a better quality of life. As long as we can keep our jobs we should be fine. We have an emergency pot just in case and will be also taken insurances (life, critical illness). I don't think we would do it without having at least 6 months of mortgage payments saved. Good luck.

dudsville · 13/07/2019 08:44

It can be a smart choice if you plan to stay long enough. The thinking behind it is that mortgage payments will get easier over time and you're making a sound investment. It isn't a smart choice if you're buying in an area that isn't expected to see an increase in house prices and you plan to move again in the next few years.

Original poster
Needmorecoffeeortea · 13/07/2019 09:06

We are not planning to move for at least 15 years, if ever. This is a move for schools. It’s in an area where this is also in the higher end of house prices. Our current house is half the value and only 10 miles away but it’s all about the schools.

OP posts:
JoJoSM2 · 13/07/2019 09:16

OP, in your shoes, I'd compare the new numbers to your current situation.
E.g. current mortgage 800 + savings 1000.
New mortgage 1200 + savings 600 still good.
BUT
Current mortgage 800 + savings 500
New mortgage 1200 + savings 100. That would be very very little wiggle room and it could get stressful if something went wrong

Digestive28 · 13/07/2019 09:17

The only thing to add is a bigger house requires more maintenance so bills may go up so if you can buffer that too. I wish I had the confidence to do it but am far to risk adverse and want to pay off my mortgage early, I hate owing the bank money.

JazzyGG · 13/07/2019 09:48

Yes, I take after my parents who always stretched themselves to the max but ultimately made a lot of money out of property. I know things are slightly different now but if you're clever about it I think you still can. So we are stretching ourselves but also see it as an investment. We brought our house for £500k 4 years ago, needed a lot of work. So far spent about £60k and it's easily worth £620k now so I know we have margin in it and I love the house. It does sometimes horrify me when I think of the mortgage and how long to pay it off and of we'd stayed in our old house I wouldn't have to work but my house is quite special/different and there was nothing else like it around when we needed more space so it's worth it in the end!

BlueSkiesLies · 13/07/2019 11:04

Did it and didnt regret it.
The absolute max the bank would lend us we litterally squeezed it to the last penny

Same.

Borrowed the absolute maximum possible. Maybe was a bit irresponsible to be lent that much!

It was v tight to start with as the mortgage was calculated on my salary + bonus, but obviously all that years bonus had gone into the deposit so the monthly salary and mortgage payments were disproportionate.

I put new furniture and stuff on an 18 month 0% CC and paid that off with the next bonus.

And in the mean time I had a promotion which eased the monthly cash flow.

It’s all good now! Glad I have this house, it’s a long term play.

mum2015 · 13/07/2019 11:19

We are doing it too. I was concerned about brexit but we cant put life on hold. We will have our savings/buffer better in two years time when childcare cost will reduce. I wish salary will increase too but cant say with the economy and brexit.

Blobby10 · 14/07/2019 07:44

I was brought up with the advice “always buy to your maximum” but to be fair, in those days you could pretty much guarantee a pay rise every year so while your costs would stay fairly consistent you’d have more income. I’ve just done it on my latest house but know I will struggle to do the improvements I need to do and will have to be patient with those!

Everyone is different- you need to asses how much effect it will have on your lifestyle to commit to the maximum and if you’re prepared to sacrifice anything to get that house. As a family we sacrificed holidays abroad and didn’t go out much so we could afford a bigger house . It worked for us but wouldn’t be right for others

SophyStantonLacy · 14/07/2019 12:49

We are going to our max which makes us feel slightly sick. But DH only works 3 days a week at the moment, so he can increase his hours & is likely to be in a more lucrative post in the next few years, plus I will go to work once the kids are all in school next year. So we do realistically anticipate an increased income while the house is for the next 20 plus years...