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.

It’s often forgotten in these conversations but the landscape is truly different now.

Sadly that’s a real risk. I am actually looking into whether we can get insurance policies to cover care costs. It’s common in the US but not something I have come across here.

Missing out on this property will hurt you a bit temporarily.
Missing out on holidays, stressing about money every month, that’ll last far longer.

We went for it albeit later in life, early 40s and no kids at home. Just about to pay mortgage off and have retired mid 50s. No regrets at all here, we still love the house and location. Value has increased by 50%.

The only thing I would say, is you’ll probably underestimate the amount of cash you could potentially plough into it. Our house is about 25 years old and we thought it would mostly be cosmetic. We updated all the bathrooms and loos, guessing we spent upwards of 30K doing that. Carpets, decorating, curtains/blinds, lamps and lampshades cost a small fortune. Drive needed some work. New fencing in garden, loft insulation upgrade. Beds needed replacing, teen room to guest room refurnish, new sofas as time went on.

Our windows are wooden and need replacing now and the hard landscaping in the garden is v tired. Oil tank and boiler are still original, so are due an upgrade soon.

You need to leave yourself some room to manoeuvre financially unless you’re prepared to live without making changes.

I see your pov but if op has one dc and wanting one more, she's prob not at tbe stage of life of big holidays - that's a lot more fun when all the kids are over 5. Plus you can home exchange etc for holidays.

You've really got to examine whether throwing most of your money for the next 5-10 years at the house is worth it for you @ChopSue

I appreciate that you don't want to hear this and that you may have left out other financial details but this sounds incredibly risky in every regard and pretty unlikely to come to fruition. I would think very carefully about stretching yourself to such an extent (unless you have someone waiting in the wings to bail you out if things go wrong!).

@BellesAndGraces I think there are a few policies, my mum was looking at some.

This 'dream house' concept is a marketing gimmick that lots of people have fallen for, unfortunately.

People in their 50s plus didn’t know they would be part of a lucky generation with regard to house prices though, they didn’t factor that in when making decisions as no one can predict the future.

In the same way, people in their 20s & 30s buying today do not know if their houses will appreciate greatly in value over the next 30 plus years or not. Best just to buy property you know you will enjoy living in. And some people will always stretch themselves more whereas others prefer the peace of mind that comes with not stretching yourselves to the limit.

Obviously people vary hugely with the risks they are able to take as well as the risks they are willing to take. It’s up to @ChubSeedsYorkie to decide what risks they can or cannot take and which they choose to.

I think you’d be really over stretching yourself with general cost of living, nursery fees and hardly any savings in case of job loss / other emergency. If a smaller house would do, I would wait. Quality of life matters. Think long term!

(combined income slightly more than you, our mortgage is significantly less, no childcare costs)

You have hit the nail on the head. Currently deliberating our options, knowing that at some point we will most likely move to a smaller place to release our equity. We have money to replace windows and garden, but it’s a balance - having what you’d really like v having what you quite like that doesn’t cost a fortune!

People didn’t know back then but we do know now that we have had wage stagnation, public services needing huge cash injections, the price of houses vs wages, cost of utilities, low birth rates, state pension issues, an ageing population. Things aren’t going to be getting cheaper and we will all have to pay more in some form going forward.

Good point by a pp upthread about potential to work part time with 2 kids, no idea about sen etc and other life challenges - not being pessimistic but you have to have some wiggle room

Exactly. I agree with all your posts and have been pointing these things out on here too. Lots of people don't want to hear negative news but it's true regardless.

How do you spend money is what I ask myself in these situations.

Do you buy lots of new clothes and high end beauty products/treatments?
Are you a waitrose or aldi shopper?
Do you have a fuckton of memberships and hobbies?
Basically if spending more brings you joy then I'd go low.

I'm a bargain hunter but my friend feels almost depressed having to watch her spends, so if you're someone who hates restricting spending then definitely not.

Best of luck with whatever you choose 💐

OP, of your take.home is 6k, mortgage and bills comes to approx 3500k I'd say you're absolutely good to go.

If its long term and you don't have to do work immediately that helps.

It helps if you're both working and get nursery hours from 2 years old so that's not really.an issue.

It sounds like it's the perfect house in a Great location... how.often do those come up?

Good luck!

I think it's doable financially if you take home 6k. And your salary will rise if you are an actuary.
Just put in an offer and see.

We’re fortunate in that we have high income jobs with above inflation wage increases and bonuses. It’s risky but if it all goes tits up we can always sell up. Property values and limited supply on the road we are buying means we will make a profit that will more than cover costs even if we only manage to hold on to the property for a couple of years. I was trying to explain to the OP that decisions such as these do not have to be permanent, you can try something and if it doesn’t work, reassess and change tack.

I havent RTFT but if you get a promotion to £100k you will lose nursery funded hours and access to taxfree childcare. So you need to factor in the big jump in nursery costs as well for you existing child - not just for if you have another child.

We went to our absolute maximum for our previous house and never regretted it. Initially, we were spending 75% of our take home salaries on the mortgage repayments and it was a struggle, but worth it to get the house we wanted at that time. This was some time ago, and property prices rose very quickly, as did our salaries, and after two or three years we were able to start having holidays, buying things for the house etc again.

I think that you might regret the loss of disposable income that the higher mortgage and running/maintenance costs will bring.

I do hope it works out well for you but we appear to be approaching a worldwide recession which means that more people will lose their jobs (this is already happening) and retail spending has slowed. There's absolutely no guarantee that house prices will rise; they are much more likely to fall in those circumstance. Hopefully you won't be in a stressful situation but history tells us that some of those who stretch themselves, or are simply unlucky with timing, do get caught out at these times.

You don't need a 5 bed house op

I think you'd be mad to stretch yourselves to such an extent tbh

I'd also point out that interest rates aren't going down any time soon and that 4/5% is normal (what we've seen over the past few years was an anomaly)

Whatever you decide, I hope it works out for you

I am team Go For It.

Perfect houses don't come up often. Condition isn't important, layout, location etc. is. We have a (large-ish) NW facing garden and it is absolutely fab.
Also, don't underestimate the power of pay rises / promotion Vs your mortgage staying largely static. In 10 years time, your mortgage will be pretty much what it is now and will feel cheap.

I wouldn't offer £620 or so though, go low.

Personally I wouldn't. Our household income is about the same as yours and your mortgage would be 1k more. We're currently comfortable and can save (planning for house renovations and uni fees) - 1k less a month would mean very little disposable income. I wouldn't want to live like that.