To move now before children or after?

[Lemon221]

Hi all,
I am completely stuck with what to do, with the cost of living rising too it’s making me very nervous.

So my current situation is this, I paid £207000 my property a few years ago and I have £87000 left on the mortgage. the property in my sole name and I was only able to purchase because of inheritance (I was very lucky) It is a two bedroom leasehold maisonette. One large bedroom but the second bedroom is small and currently is my office/drying room lol. It has a shared patio which is overlooked by the other properties so I don’t spend much time out there. One smallish bathroom with a bath. All decorated to my taste and I had the kitchen doors and counter top replaced to make it look modern. it’s a lovely little house but small 700sq

My partner has lived with me for two years and been paying me rent of £500 a month which I overpay on the mortgage. Which has help build equity.

I had the property valued and have been told anything from 240 -275k.

We want to live in the local area and nice 3 bed properties are around 400k - 425k

we want to start a family, we could possibly stay but it would be an absolute squeeze (no idea where I’d put a pram!) but would mean for a few years we could stop overpaying the mortgage and money wouldn’t be tight, but I would have to wait until I’m full time again to be to afford a three bed house.

Or we could borrow to the max on both our full time wages and move to a vastly more expensive home and have room to grow with a garden, but knowing that (hopefully) in the near future that I would be dropping down to PT time wage and money will be tight. I earn 24k and my partner earns 33k

Help! What would you do?

Well done for getting to the end of this haha x

How would you cope with large mortgage repayments on not particularly high salaries? If it is a bit of a stretch now, it will be more of a stretch once you have a child. If you are planning to reduce your course, it will be even tighter. What happens if one of you loses your job? Could you still afford the repayments if interest rates treble when you next need to remortgage?
It's one thing being able to persuade a bank to lend you money which you may or may not be able to do and another being able to afford the repayments.

Def move first , having children will get you a deduction on how much they'll lend you .

What are you doing to protect your considerable equity? I’m presuming you’re not going to have the new property as 50/50 joint owners?

Where have I said I can’t afford the payments? We are overpaying by at least £500 pcm? And yes that’s why I am asking advice of those who have been in my position would they move or borrow as much as they can.

We may not have the highest wages but we don’t have any thing on credit and spend wisely, no cars on HP etc and still manage to save. If we were first time buyers with a small deposit and we were borrowing to the max would you tell them the same ?

I have spoken to a solicitor and they will draw up a deed of trust so that the deposit is mine and after any equity after that would be 50/50 :) will have to consult again to find out what happens with marriage x

*Where have I said I can’t afford the payments? We are overpaying by at least £500 pcm? And yes that’s why I am asking advice of those who have been in my position would they move or borrow as much as they can.

We may not have the highest wages but we don’t have any thing on credit and spend wisely, no cars on HP etc and still manage to save. If we were first time buyers with a small deposit and we were borrowing to the max would you tell them the same ?*

I think PP was just trying to point out that costs can quickly spiral out of control, particular as interest rates are going to rise. The £500 you're currently overpaying won't go very far at all once you factor in even part-time childcare. Our monthly childcare bill is £1200+ outside of London for example and would still be £800+ if we only needed 3 days a week.

I would move before having a child, my sister moved when their son was 9 months old and she wouldn't recommend in. It meant mostly that only one person was available to unpack and do decorating/diy etc as the other was looking after the 9 month old. We went and helped them out as mine are teens.

Also mortgage calculations would take into account a dependent child and the possibility of childcare, if you move now it is just the two of you and you could end up with twins.

It is all well and good saying store the pram in the boot without thinking about having to retrieve it every time you want it and if your child is sleeping you can just wheel them into the house and leave them in the pram. It is good to have somewhere to park it.

We have never borrowed the maximum the mortgage company would lend so we have always had more disposable income that way. Good to have a buffer.

Really good advice Thankyou, how much less would you borrow if you were in my situation? Xx

I don't know why you are getting defensive. You were asking for advice as to whether it's a good idea to 'borrow to the max' in the circumstances you have described. Obviously, a large house is better with children and obviously it's easier to move without children.

However, surely it's common sense to question yourself carefully as to whether/ how comfortably you can afford relatively large repayments on your salaries, particularly as you talk about going part time (that would more than swallow up the £500 you overpay at present on your small mortgage). A child will obviously add to your expenses significantly regardless of whether you reduce hours or not. In addition to this, interest rates are rising and the cost of everything is rising due to very high inflation. You need to take all these things into account before you decide.

Yes, I would say the same thing to a FTB.

Thanks @GiltEdges for understanding what I meant!

Do it and get a lodger for the first few years

I’d move now

If we were first time buyers with a small deposit and we were borrowing to the max would you tell them the same ?

It all depends on circumstances. Borrowing max isn't a problem if you have a low LTV &/or a high income. 2.5k mortgage on a take home of 6k leaves a lot more than the same proportion on a lower salary. Plus I think it's prudent for anyone to borrow less (unless there are lots of savings) if going into the young dc years where you have childcare costs & potential loss of income.

How much are your current mortgage payments?

I'd do the calculations first - so a £260k mortgage at 2% interest is around £1100 pm. If interest rates jump to 5%, that's more like £1500. 8% would be £2000. Would the council tax increase a lot? How about gas/electric?

Then factor in you going part time and potentially some nursery fees (in my experience you can't solely rely on family - what if they get ill or need to go back to work or just don't like the responsibility after years without it - looking at you MIL )

If the numbers all work out - definitely do it sooner rather than later

Yes def factor in nursery fees. My MIL decided she didn’t want to help any more and now we pay 1800 a month (2 kids but not full time) which we could luckily absorb but annoying (that said, nursery has done them wonders!)

we will feel very rich once we stop paying those in a few years when they are in school!

I think you could be sensible here - put a big chunk into a savings account for the first year of a babies life - maybe even nursery fees for the first year after maternity leave.

Then use a mortgage calculator and see what you get - then move.

Yoire lucky you have breathing room but defiantly move before children - after the baby you have lower salaries and lower offers. Even if you can afford it.

I won’t advise on how much to borrow but I would recommend moving before children. Your ability to get as good a mortgage is affected by childcare costs or potential childcare costs, and loss of earnings if you go part time. And it’s good to be settled into a new place before children arrive - much much easier to sort things out without kids / babies around.

sounds like you’re staying in the same town, but particularly if you were moving somewhere else it’s good to do that before kids too so you can join parent groups in the area you’ll actually be living in, rather than making those friends then leaving them all behind when you move (this is what I did - not great!)

You should definitely move before children as if you go part time your income will reduce and childcare costs will be deducted from income and it looks as though you are at max affordability or near enough at the moment
Don't forget to factor in stamp duty, estate agents fees and solicitors fees as well
I don't know how old you are but if I were in your position I'd stop overpaying the mortgage and start putting that money away to cover maternity leave and childcare
I'd then take the new mortgage out over a long term to keep payments as low as possible and then look at overpaying or reducing term once childcare costs are done
We found things really tight financially in the childcare years but now we are not paying it, things are much easier and we can overpay and get some savings behind us
I'd also choose a 5 year fixed rate

Really good advice Thankyou :)

Really good advice Thankyou xx

Thankyou that’s great advice! I felt so daunted by it all x