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.

We chose not to push the mortgage. Life is complicated. We have a teen now with SEN and mental health difficulties, and we've both had our own share of MH problems dealing with it all, so we have ended up as a one income family. I literally don't know how we'd have coped if we'd taken on the bigger mortgage. I guess we'd have sold up and moved somewhere smaller with our mentally ill child. That would be tough.

Take care on price too. An EA advised us that a 5 bed is not worth much more than a 4 bed, because so many families don't actually need 5 beds. That was pre-covid though - it's possible or likely that the 5th bed is more desirable now more people are WFH.

You need to put a note through the doors of all the 3 beds in the area, not buy a 5 bed 2 reception room that you don’t seem to love or need.

In terms of risk, a 5 bed will be far harder to sell if you need to move in a hurry than a 3 bed. I see you or a PP said you can always downsize, but remember you have to find someone who wants to buy a vast house in the first place. I doubt we are ever going back to 1% mortgage rates. The pool of people prepared to buy 5 beds is ever decreasing.

@ChubSeedsYorkie I’m with you - a risk averse person! To the point I struggle to make decisions and sometimes just lose out through inaction! But we actually did just this. Same income as you, roughly same mortgage outgoing, two kids in childcare. I ummed and ahhed for ages! Had spreadsheets on all costs, looked at how it would cost to move again in the future. House was also not in the best condition compared to the photos.

In the end, it was only because someone else bid on the house I realised just how much I wanted it. I was on the phone so quick to that estate agent putting in an offer! So you may find if someone else does bid, you feel the same!

But it’s been absolutely fine. Childcare years are short term, we’ve both had promotions so actually have more disposable income now than previously, and we have our dream home in perfect location 😊

@ChubSeedsYorkie been reading your further posts. I’ve said ‘go for it’ but in that case it has to be right. Tattiness is transient and can always be changed. Important things are:

Location (noise, access, not on a ratrun etc, schools)
What utilities (is it mains gas etc)
Parking for you and visitors
Which way garden faces
Nearest station/bus stop
Local shop/offie?

of course the order varies depending on your needs but location is the key.

if this place meets all those and you got that warm fuzzy feeling then … even if it is a stretch, do it.

if the things you need to compromise on are things you can’t change and will bother you … don’t!

That’s interesting. Cuz one of my main negatives is that it’s a five bed and we don’t need 5 beds. The 4 beds on the estate are normally about £550k but this one has been extended a bit as well to get a bigger kitchen and utility oooh and a pantry!! Obviously not going to base the decision on a pantry 😂 but it was a little plus point. I think as well I’ll just find 5 bedrooms too much work.

Yes, we did just under 20 years ago. We also didn't declare I was pregnant with our second si we could extend our mortgage.

The house was a big doer upper and we spent years doing it up.
It's been a great house to live in and a very good investment as it's now worth more than double what we paid for it.

I would stress that we bought it knowing my husbands job was stable and that we could definitely afford the higher mortgage payments.

ahhh this makes me think it could be the one, like you I’ve always said if there are things you can’t change but would want to don’t go for it (made this mistake on our current house). This house has everything we want and we wouldn’t change the layout.

Location is my dream location (I grew up in the town and since being a little child loved these houses), garden is north west which is not ideal but it’s big enough that it’s not dark and dingy plus the current owner has put built in seating where the sun hits, parking for two cars plus lay-bys on the road for visitors, walkable to town and train station so that’s all good.

Interesting, I’m thinking maybe we put in an other and see how we feel if that gets rejected or someone else offers higher.

We did this, I don't regret it 8 years later. You can always sell...the tattiness though - it would concern me that you'll find more urgent work than you expect. If you have good expectations of your income improving, it's great to have space when you have small children for play room, study etc, the endless clutter. But we were absolutely certain we wouldn't find a better place and we haven't.

Thank you everyone for your responses.

Good to hear about those who have pushed themselves financially and don’t regret it I’ve got a lot to think about. Husband is happy either way!

I wouldn't even still be thinking about it - I would have put in an offer by now if it was my dream location and a lovely house.

I have always gone to the top of my budget for houses, even if it meant being a bit careful for the first couple of years after moving. To me there's nothing more important than the house you live in and I get immense pleasure from my house on a daily basis. I would rather cut back on other things each month than buy a house I didn't love as much to save money.

All I can say by comparison is our income is £6500 post tax, we have 2 children but not in childcare ages, and the absolute max I'm willing to let my mortgage go to when we remortgage is £1800. So you'd be maxed a lot more than I am comfortable with. When we were making our decision I ensured I had every in going and outgoing mapped, future projections (income rises? More children?) and our aspirational purchases (usually related to cars and holidays) only then can you work out if it is workable for your situation.

@ChubSeedsYorkie there’s your answer then! Give it a shot.

We went passed our top budget buying our current property, we were funding the purchase from equity and savings and literally needed my last pay before we completed to be able to pay the movers, we had no savings left at all.

It's a different situation because we don't have a mortgage, (we're in our 50s moving hopefully for the last time) but there's a lot to do to the property (needs modernising in terms of plumbing and electrics to start with). Also supporting dc at University.

The plan was to buy a property and have some cash left over to do any work, we looked at other properties that would have left us a healthy budget and needed less work but felt this one was worth it (size and location) we'll do the work as we save up and we'll live with things taking longer and lthe disruption once the work gets underway.

if it was 10 years ago I would say max but with todays rates, cost of living & dc I think that’s too much. I also think the days of huge equity gains are over for some time.

I don’t advocate for the usual MN narrative of we earn 12k a month & feel stretched with our £600 mortgage but I think 2.2k is tight from 6k with childcare & not much in savings.

That said, I know actuary is a very lucrative career path. I would stress test your finances as they are now with the childcare bill of an additional child, if you're comfortable with those figures that should give you some piece of mind. Could always have a longer term and overpay rather than locking yourself into a shorter term and higher payments in case things do get a little sticky in the childcare years.

We are winners mainly because of the generation we were born in.

100%

If you'd buy it at 50k less offer £585k and see what happens, make sure you know what your top spend is (maybe £600k?) because they will likely counter and if they don't accept they don't accept. You've got nothing to lose making an offer in a stagnant market when it's been on a while and if someone else gets it, it wasn't meant to be

Lol maybe you have poor financial management? Hard to say based on the limited information you have shared. Similarly hard for you to say whether I can afford private education based on the limited information I have shared.

If it would be perfect at £50k less than asking offer £50k less than asking, you never know they might accept and offering 5-10% under asking price is what I was told is standard. Even if they won’t accept £585k it might mean you end on something like £600k which means stretching yourself far less.

We pushed ourselves on an earlier purchase and don’t regret it. There was a few leaner months but we made much more than expected when we sold it on. It was wonderful to have a house we really wanted rather than an ‘ok for now’ house.

We are fairly happy with risk but my view would be to try to buy it. As an actuary you will be well placed to assess your risk carefully. If you think it could work, I’d go for it. You clearly love the house. I suspect you would regret not trying to buy it.

Also, as an actuary your career is pretty solid and safe. Your earnings will also significantly increase.

p.s I’d start lower than 610k. It’s been on a while and is a bit tired on the inside and they need to move….

I did. Bought a fixer upper at the top of my budget. Which sounds like madness but I bought it for the location and the space. It’s hard - I’m a single mum with two kids paying for extensive renovations and a hefty mortgage. I’m not going to lie, I earn good money but it’s still tight… but actually I don’t regret it. There has been nothing else come up on the market for cheaper with the space we need in the location we need. My children can walk to pre-school (and indeed school when that starts), they can walk to the park, we can walk to my parents. The garden is great and I am 10 mins from work This is just what property costs here and here is where we needed to be.

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.

Or it may all end going on care, in the future we are all going to have to contribute a lot more for care /health costs due to shifting demographics.

I mean … some people would say the less than perfect condition is where you could add value over the years, in bringing the condition up to a higher standard.

As long as the road & area would support you getting back the money you would invest into it of course.

I'm not sure who you have quoted here but this is spot on.

Those in their 60s/70s/ early 80s now were born in the best generation to do extremely well financially. Many in their 50s have done v well too, especially 55+.
If you now in your 30s @ChubSeedsYorkie, you are not part of the lucky generation and can't afford to take the same risks.