Go for the financially comfortable option or stretch ourselves for the perfect home?

[Boxiboxi21]

Option A: 315k 3-bed semi, nothing wrong with it, just quite small and surrounded by neighbours in a cul de sac with properties at the back too. We could comfortably afford this even if I lose my job. We would have approx 18k left over in savings.

Option B: offers over 375k, 4-bed large semi, better location and facilities nearby, not overlooked at back, has own suite for family members to stay. This would be our forever home!

My partner and I have a baby on the way and my job may not be hugely secure after my maternity leave early next year. We could afford the 375k now but it would wipe out all our savings on stamp duty and the deposit, and mortgage would be £400 higher a month which would be very tight if I lost my job. Which would you say we should go for?

Why not offer 320k on the one at 375 ? With the way the market is, its quite possible they might counter offer at somewhere in the middle ?
Personally I would recommend staying put if you can until next spring, prices may have started to fall further. They won't have gone up anyway - that's for sure.

Is there any likelyhood you'd lose your job?
I'd say go for the more expensive one, you may not get another chance.
If you go for the cheaper one you would most likely be looking to move again.and have to use your savings anyway.
It might be worth stretching that bit more now, who knows what the future brings.

@DrySherry its offers over 375k and in a super popular area - a rare find really. V much doubt they'll accept anything under (though we'll keep pn at the estate agent to sense check).
Can't really stay put...in a 2 bed semi atm and will be a tight squeeze once baby needs their own room, plus neighbours are awful and area isn't great. It's also far from family for childcare. And far from nearest city if i look to change jobs.

@Bitolderandwiser the commute to my current place of work won't be great after my maternity leave (it's difficult to manage even now). Agree with stamp duty and if house price continue to rise etc we may find upsizing more difficult in the future.

Having had to move after only 4 yrs in our last home as we didn't pick quite well enough (felt a bit rushed) I would say moving is expensive. If I had our time again I would have stretched more for a better area and bigger house and taken a longer term on the mortgage. Especially if the difference was 50k. Stamp duty and fees alone could be half that should you need to move again as your family grow.

Stretch yourselves, if the property really is a 'forever home'. How often do they come onto the market, pot luck.
If your finances change will you be able to carry the mortgage long enough to sort something else out financially? If it's a desirable property you'd have no trouble selling?

I’d go for the safer option right now, as the whole economy is looking dicey. Not a good to take risks imo.

@Okdokeyartichoke I just realised I could get a lower paying job and we'd still be able to afford the mortgage on a 375k house even if rates went up after a 5 year fix to say, 9%.
I'm leaning towards going for it...

I'd go for the perfect home. We've just gone put our house on the market today, already got quite a few viewings booked in, but are slightly worried there's nothing we want to buy on the horizon! If it's a house which ticks a lot of your boxes and has plenty of room for growth, then it seems worth tightening your bootstraps for a few years if needed.

The house you are interested in must be getting loads of offers? Are you selling the house you live in or renting?

Go for it, I think mortgage rates could easily hit 9% as well, but it sounds like you can afford it!

@KeepPumping 375k house has only been on market for two days, so doubt it'll have offers yet. I will need to sell my house to afford as large a deposit as possible and avoid higher stamp duty on 2nd house (annoying as I won't have to sell immediately for the 315k house...which makes me chain-free essentially).

In a difficult market ( for people who are overpriced) do you think you can sell quickly at the price you need?

Go for the bigger house. We bought a 3 bed semi before we had kids. Now we have a toddler and a baby and it’s a squeeze. I’m desperate for bigger bedrooms (can’t actually fit a bed in the smallest bedroom) and more downstairs space. The kids toys are everywhere which I love, but it would be nice if they had more space to play. If you can afford the bigger house now then it’ll save you wanting to move again in 5 years.

What is really confusing me is that you said about your own house - "neighbours are awful and area isn't great." but the house you want is in a "super popular area", what makes you think someone will want to take your house off your hands AND the supposedly sought after house will still be there?

@KeepPumping there's not much equity in my house at all, i've had it a very short time. Majority of the deposit will be coming from joint savings.

We're unlikely to be growing our family but the 375k house (and houses generally around that price point) will have space for a family member to stay and help with childcare overnight if needed. That's a massive plus for us too.

Personally I would go for the cheaper house. Also you might not get an offer accepted anyway on either because you havent sold yours yet.

You need to sell your house before making plans, it might not sell or might sell for less than you think it is worth.

Look up mortgage protection insurance and see what the comfort / sums look like for the second one.

I've heard pessimistic things about mortgage protection insurance @AbzMoz , like it only being paid out in specific cases of redundancy, not if I leave because my flexible working request has been denied or I get dismissed because I am unable to do the commute for example. But I'll look into it further.

Go for option b.

If you bought the smaller house would you want to move again in 4 or 5 years? If so, go for the bigger one. By the time you’ve paid stamp duty, conveyancers, surveyors, movers, and gone through the pain of moving, you’d be much better off going just going through the pain once. Plus, you’d probably go through the hassle of redecorating the smaller one only to have to move and do it again. If you can afford both reasonably comfortably, do it well - do it once, as my dad used to say 😁

Def b but Neither will take you seriously till sell your house

Exactly, they might not even let you view it.

Have you got 6 months of bills saved as an emergency fund? Debt free? Pension? How long are you looking to have the mortgage over. If the answer to the first three is yes and the last is 20-25 years I’d maybe go for the dream house.

Also massively depends on your job. Is this first child? Chances of you wanting to be a SAHM?

If you haven’t sold you might not get either of them.