Anyone maxed on a house?

[ChubSeedsYorkie]

We looked at a house yesterday that is top of budget. It has been on a few weeks and I was hoping it would sell quickly so I could forget about it but it didn’t so I booked a viewing.

We viewed it and I thought the price would put me off and I’d decide it wasn’t worth it, but very much just wanted to get it out my system as it’s in our dream location.

My husband loved it and said it’s got everything we need. Lovely garden which is important to us, two reception rooms and utility room. Plus 5 bedrooms (we’d be happy with a 3/4 bed).

It was a bit more tatty than the photos let on but it’s perfectly liveable, a family of 6 currently very happily live in it.
If it was a 4 bed and 50k cheaper I’d be all for it. But the price is really worrying me.

Its on at £635k.

Our mortgage would be £480k. Hopefully a bit less if we offered under asking. I’m going £610-£620k given it’s not been on a little while now and the vendors have found an onward purchase.

We also have a little one starting nursery in January and would love one more child. Still doable on this house but we’d be quite stretched.

Mortgage would be about £2200 a month based on porting our current mortgage and borrowing a bit more. Our income is about £6k a month. Nursery fees once 30 hours come in is £500ish. I do take some salary as shares so if we were really struggling I have about £300 extra a month I could take as cash.

Wed also wipe out our savings on fees and stamp duty. I’ve calculated to have about £5k left over.

Has anyone over extended themselves for a house? Did you regret it? Or is it the best thing you’ve ever done?

Im such a risk averse person that I think it’s maybe too much but the house is ideal in that wee never have to change the layout etc. it is all cosmetic work we can do over 10 years to get it to our taste.

Edit: just to add someone else viewed the house yesterday and I’m hoping they put an offer in that gets accepted just so we don’t have to make this decision. I do wonder if that a sign it’s not the one for us.

Agree if we were one and done I’d do it but I would like two kids. We are already in the town so thinking we get nurseries years over first.

Buying this house wouldn’t mean you are locked in forever. If it becomes unaffordable or life is too miserable on a tighter budget you can always sell up and buy elsewhere. If not helps, I generally find that you spend what you have. The less disposable income you have the less you will spend!

We are about to do similar. Net pay of £9k pm. Current mortgage of £1,700 which will go up to £3,700 (5 yr fixed) but we are buying our dream house on our dream road. £2k school fees. Money will be tight but we are prepared for the challenge of living on a tighter budget and when we eventually downsize our house will get our DD on the housing ladder, pay for uni fees and buy us a nice retirement property with plenty leftover to enjoy retirement.

There is no immediate work to do so perfectly liveable. But the kitchen work top is wooden and just a bit stained and bowing around the sink (I hate wooden worktops for this reason). I think just general tatty-ness from all the kids living there.

Bathrooms a bit dated maybe 2000s style. Bedrooms all fine.

I think as well if they rejected our offer I’d maybe be a bit relieved so that’s probably telling us something.

We just really want to move to the other side of town and this is the only house that side atm that’s suitable. But I’d be happy moving in the next 2/3 years so there’s no rush. I think I’ve convinced myself tbh and hearing most people say no it’s reaffirmed what I think I’ve been feeling deep down.

Yeah I’m using this to convince myself it would be okay, as it’s fixed against an asset it’s not like we’re taking out some mad unsecured loan.

Finances aside, what’s stopping you from waiting for an easier to manage 3-4 bed? Do two of you WFH?

A 5 bed with two reception rooms sounds very grand and handy to have rooms for guests and hobbies, but not if you also have to raise kids, clean it and do the gardening and maintenance as well.

If the answer is “just because we can”, that might be the wrong motivation.

I get it if you want 3+ kids. But you said you want to stop at 2. So, why the mini mansion? :)

Are you nuts. I have put kids through private school- you can’t afford it.

@RosesAndHellebores It depends on how you want to live. We wanted to be able to holiday and we did and sometimes multiple times a year. We also wanted to retire by late fifties which we are doing now easily. These days I can manage a 10 mile hike but 20 years ago I could hike 20 miles in a day and scrambling up mountains was far easier. Those years never come back. I have a friend who loves her house and has spent a considerable amount making it exactly how she wants it. It’s a case of priorities being important to each individual, it’s just when a huge financial decision like this and I think it’s good to garner multiple opinions. Plus I doubt very much the op will make such a good gain as you or I have. The house across the road from me has been reduced by 75k over the last six months. My house is worth 400% more than when I bought it as you bought in 1992 I would hazard a guess at your % being even higher. The risk is much worse these days. We are winners mainly because of the generation we were born in.

I'd be inclined to go for it. It sounds like a solid foundation for life and it doesn't sound like the financial risks are unmanageable.

I mean, sure you could downsize if it becomes too much, but that's thousands in fees, twice.

Personally, I wouldn’t, we are on about 7k per month and a mortgage about a grand cheaper than yours would be…. And although we aren’t on the breadline some months are a lot more strained than others with other costs etc. On paper, you would think we would be fine but with the cost of living and things, I do really worry. I do wonder how people on a lot less than us survive

We want a specific area so it’s a bit take what is there. But we also don’t have to move, we are in the town already just hate where we live :( we did originally have an offer accepted on a 3 bed on this estate but that fell through so we bought our current house but realise we should’ve wait for this estate that we love. But you’re right nothing stopping us waiting and we are prepared to wait there is no urgency to move atm.

The three beds on the estate all have garages you can add a fourth bedroom above and I’d secretly love something that we can extend a bit and make our own (family seem to think I’m mad for this!) a three bed would also be cheaper than our current house so we could extend with cash and mortgage.

I suppose I worry what if nothing comes up but that is silly something will come up eventually.

I kinda think it would be worth it, personally. Prices at the moment, and the housing market are quite depressed so I think now is a good time to pick up something you might not be able to afford at another time. However, i would put a decent long fix on it - something like 5 years - especially with baby prospects, so you have a really clear sum you are paying with no variation.

I agree it IS absolutely okay and i dont love the notion of forever homes, so if you are happy with the parameters go for it

but at those prices stampy duty / legal fees etc. you want to be sure / confident you can hold the property for 5-10 at least?

If you struggle and "fail" at 2 year mark you might not wipe your face on it and it wont be fun for anyone

Agree I’d do 5 years for sure. This house would’ve been close to £700k in 2022 when we first moved out to the area which is definitely unaffordable. I think the excitement we could actually afford it is getting to me but I’m such a risk averse person it feels too much.

As an actuary you are more than capable of doing your own risk analysis and sounds as though you have. You know it’s a poor decision and don’t even seem to be buying with your heart. The most successful house purchases are a combination of heart and head.

also, if it looks tatty now, it will turn into a money pit. You’ll likely find windows are draughty and when you do the bathrooms the boiler and water tank will be inadequate for a power shower, white goods will be on their way out and the kitchen will irk more and more. That £5k won’t cover it and you might want to go part-time after the next baby but are the main earner.

I think you could stretch to it but it really is a pain having a larger house than you need - move to clean, maintain, decorate etc with no purpose. Also make sure you get a good survey as you won’t be able to afford any nasty surprises that come up, plus you won’t have much at all for redecorating.

We’ve overextended on every property we have bought - not recommending that strategy necessarily as it depends on your attitude to risk. But it has worked well for us over the years as more desirable properties tend to appreciate in value more than less desirable ones.

If you do decide to offer on this house, 600k seems like a reasonable offer assuming you’re not in a property hotspot.

Haha I’ve made some wonderful spreadsheets 😂 I think you’re right that this is just too much atm and that’s the decision I’m leaning towards. I’d be too stressed each month with the mortgage payment.

In reading though sounds like you have a plan and a back up plan- I'd go for it!

Bear in mind that if your income does go up to £100k as you mentioned in another comment, you'll either be spending a lot more on childcare (you lose all the hours until they're 3, and only get 15 after that) or you'll be salary sacrificing into pension so won't have the extra cash available.

Our income is the same as yours and I would not feel comfortable with a £2200 mortgage and planning another child. We only have one child and even then a £2200 mortgage would really affect our quality of life. Our current outgoings adjusted to have a mortgage that size would be £5k, leaving us £1k leftover for everything that isn't bills, groceries, petrol and nursery. That's more than fine for us with one child but would be quickly eaten up by a second child in nursery, or even just the extra day to day costs of a baby.

Maybe going against the grain here but I think I’d go for it provided you think you would still be there when kids are at secondary. It sounds like the kind of house you can grow into and more space will always be handy! Nursery fees are short term pain so if you can afford both now and live with the house you can do the cosmetic work once kids are in school.

It is much much easier to move before kids are established in school. We’re probably going to have to move for a good secondary for DC1 which will mean uprooting both kids from their lovely primary. I wish I’d thought of this before we bought our house but I was pregnant with dc1 so didn’t even cross my mind.

Don’t do it… you don’t love it enough. I was expecting you to be waxing lyrical about it but you’ve pointed out lots of bad bits. Keep looking imo.

Thats our original “top budget for the perfect house” so thinking we’d offer that if we did. I am so risk averse though which I think is what is holding me back. I’m also not convinced it’s the perfect house, the photos made it look like it was 😂 but the actual state of the house wasn’t that great.

@ChubSeedsYorkie I did stretch myself for a house and it was the best thing I ever did. If it’s your dream house you will get so much pleasure even if things are tight for a while. I didn’t see my house in daylight for the first year as I was working all hours to finance but … so happy I did that