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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:
notangelinajolie · 14/07/2019 13:17

Absolutely, yes the max. It's the way we have always done it. it takes determination and a lot of sacrifices but well worth it for us.

Our rule is we buy the worst house in the best street and break the ceiling barrier when we move.

We have moved up the property ladder on only one less than average salary but the house we are currently in is worth way above what anyone would expect. Me and DH laugh at ourselves because we look like the Clampets and most people are generally very shocked when they come round Smile

It has meant no holidays, cars, clothes or make-up 🤪 or anything nice for that matter so you do have to be pretty determined and have a good strong relationship if you are doing it with someone else.

Good luck, but yes I'd go for it.

notangelinajolie · 14/07/2019 13:24

*Needmorecoffeeortea

We also have a 6 year old*

Our 3 lived to tell the tale. Kids are along for the ride - before you know it they are gone off to Uni. Sometimes they moaned but don't kids moan anyway?

TanMateix · 14/07/2019 14:40

I did it, no regrets but it came with a LOT of sacrifices and not having much money to spare for many years.

NotAngelina’s advice is spot on but, in these times of Brexit uncertainty I wouldn’t risk it. The normal adjustment in volatile economies is to change interest rates, if things get nasty with a no deal, the interest rate may go up.

Having just one part time worker means also that all your eggs are in the same basket. What happens if he gets ill long term or looses his job? I think you need to hope for the best and plan for the worse but spending every penny in the house doesn’t give you much room for manoeuvre.

OneRingToRuleThemAll · 14/07/2019 15:04

I didn't stretch and regret it. The flat I bought for £100k is worth £200k. The house I didn't buy for £130k is now worth £280k.

The flat has also needed £60k of renovations and a £10k lease extension. I would have saved by buying the house.

TiddleTaddleTat · 14/07/2019 18:41

The context you have provided OP does make it a little more risky - how much of an emergency fund will you have spare if you go to your max?

TiddleTaddleTat · 14/07/2019 18:43

For context - we borrowed close to our max, had £15k spare, spent £10k on renovations and are now trying to build a decent contingency fund with the remaining £5k. But we've done this with one FT and one PT worker (both permanent) and a guaranteed salary increase (by a multiple of 2-3) in two years time.

Original poster
Needmorecoffeeortea · 14/07/2019 18:45

The max budget house needs no work doing. Deposit and moving costs will come out of equity so we will retain our savings of around £15k.

OP posts:
Alarae · 14/07/2019 18:52

We stretched in order to get my forever home (unless I win the lottery!) and have zero regrets. Never felt like 'home' in our last house, but this one brings me so much joy.

I was only 25 at the time so anticipating salary increases which will makes things easier. As it happens my salary has increased (by about 7k) since we got the mortgage so have slightly more wiggle room.

We also pay FIL £500 per month for the deposit we borrowed from him, so if it came down to it, we can reduce/pause payments for a little bit to give some breathing room.

TiddleTaddleTat · 14/07/2019 19:12

£15k sounds good if you don't have any renovations to do. Easily swallowed up for eg. Unexpected costs such as new roof or boiler though.
They usually say 3-6 months bills should be put aside as well as emergency house costs. We have nowhere near that and couldn't afford to do it.
I don't regret going to our max, the alternative was to buy a house that we'd have wanted to move from in 3 years which would ultimately be more expensive.

Notyetthere · 15/07/2019 08:41

We were first time buyers with me approaching my 30th birthday in a few months at the time and we did stretch ourselves to the limit of what the bank would lend us. This enabled us to just about afford a 3 bed house. We saw it as a 10+ years house so we didn't have to move so often as it is an expensive process.

The 3rd bedroom is a small one but now with a child, DH back to work part time, it is not such a bad compromise and we can still make it work. The house was big enough for us to grow into with a young family. We definitely skipped a few rungs on the property ladder and I really don't think that is a such a bad thing.

CherryPavlova · 15/07/2019 08:46

We’ve always stretched ourselves to move up the property ladder and encouraged our children to do likewise. It has meant bigger returns on our money and being able to afford a holiday rental property and buy our in laws house, releasing equity for them to enjoy in retirement.

ChicCroissant · 15/07/2019 08:47

I would be wary of interest rate rises if you would find payment even at these low rates a stretch tbh. People did use to max themselves out on property purchases but that was in the days of very high percentage wage rises which are no longer the case unfortunately!

Original poster
Needmorecoffeeortea · 15/07/2019 20:33

Is this super stretching ourselves? £1400 left over after all fixed bills. So just fuel, food shop and general spending from that. And we would be keeping a small savings pot. It’s a huge jump in mortgage for us though!

OP posts:
Ivegotthree · 15/07/2019 21:05

OP are the good schools a given? IE you sure you won't be stuck with a bad one despite the move?

And do you have any pay rises in the not too distant future so you think

JoJoSM2 · 15/07/2019 21:22

The £1400 leftover really depends on what you’ve been used to. Some people will think it a lot whilst others not much.

You know best how much you’ve been spending on the stuff in question. Cutting back from £1600 shouldn’t be a problem. Cutting back from £2500 might feel awful.

Original poster
Needmorecoffeeortea · 15/07/2019 22:00

The good schools will be a certainty (as far as my crystal ball can tell me and subject to no really unusual changes!).

No real pay rises for one of us (public sector and close to top of pay range available for role). The other is likely to have some pay increases but nothing substantial guaranteed.

OP posts:
senua · 15/07/2019 22:14

I don't regret going to our max, the alternative was to buy a house that we'd have wanted to move from in 3 years which would ultimately be more expensive.
Yes, Stamp Duty is so expensive these days that you don't want to be moving too often.
It seems to me that £1400 spending money - after mortgage, bills and food - is a lot, but I live cheaply!

ChicCroissant · 15/07/2019 22:51

If you are moving for secondary schools for a child that is only 6 now, I think a lot could change and it's far too early tbh!

Original poster
Needmorecoffeeortea · 15/07/2019 23:49

We are selling our current home for other reasons so it makes sense to do the school move now.

OP posts:
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