I have seen my dream house. It would mean increasing our mortgage quite a bit. Would we be foolish to do this right now?

[sinkingfast]

DH is working FT but his industry is not looking fantastic. I'm working PT but could do more (which would cover the increase in mortgage payments). If we bought this house, the only way I'd ever be leaving it is in a box.

Sooo...am I mad even to consider it??

no not mad at all, not a bad time to buy - the question is, do you need to sell? THat will be the tricky bit

Yes, we'd need to sell. Tbh, I think that will be the problem . Buyers are apparently being very "picky" atm according to the estate agent.

Wouldnt increase my mortgage payments now for toffee, and we are financially very comfortable. Not the right time.

Hmm, well that's what I initially thought MrsMattie and tbh we are incredibly cautious financially. But this really is a once in a lifetime opportunity - it's a family house EXACTLY where I want to live and it won't come up again IYKWIM.

The thing that would scare me is what would happen to your repayments when the interest rate rises again?

Is it really that special? You might end up being there 365 days a year if you can't afford any holidays etc

I'd go for it. Make sure you get very good income protecion tho (don't really know what I'm talking about here but I'd want to make sure we had some insurance shd my DH's job go wrong)

I'd worry about interest rates going up again, they were 12% when we bought this house, and it was hard, could you afford that kind of rise, mortgages last a long, long time.

There's good food for thought here, thank you. Interesting that opinion is split pretty evenly.

Hmm...AARGH!

How easy will your house be to sell? That might be your deciding factor (depressingly and boringly). Also worth scouting a look at mortgages before you get your hopes up; the deposit you need now is far greater than it used to be a few years ago.

Sigh.

Put your house on the market; if no one bites then you don't have to make up your mind, the decision has been made for you.

Absolutely the time to be trading up, get income protection insurance and you're fine.
Selling might be an issue though, so make an offer on this one to give you an idea what you can let yours go for.

I would put your house on the market and see what happens. I agree with Sorrento, best time to trade up is whilst the market is poor as you pay less to trade up with lower prices.

If you're stretching yourself with the new mortgage then consider taking a long term fix so you know exactly where you are with your mortgage payments, Chelsea building society have a 5 year fix at 4.29% and a 10 year fix at 4.59% if you have a LTV of 65% or less.

Well, I'm having it valued and will go and see the other one, so we'll see what happens...

I think if you can sell yours then go for it. I idly had a look at mortgages earlier today and it is possible to get a 5 year fixed rate for which the repayments are £100 lower than they were this time last year. Obviously a tracker is even cheaper, but if you want the stability. Also the issue seems to be with deposits rather than multiples of salaries. I used four different mortgage calculators and the lowest quoted was 3x joint salaries (and frankly I think borrowing more than that is insane anyway!)

Why does everyone think interest rates are going to go up? They will not go up significantly in the near future.

wynken what's LTV? (long term ??)

Loan To Value

(ie how high you mortgage would be as a % of the value of the property)

thanks TTP

If you can sell, go for it. Fix in for a couple of years. Interest rates will not be 12% for AGES and with savings interest rates so low, I think it is better to buy your dream house when the market is low and pay your mortgage off than keep you mortgage down and pay into savings accounts which are earning peanuts. As long as you have income protection, then you should be OK. You won't be able to get rates of much less than 5.8% unless you have more than a 15% deposit (ie. LTV of 85%) - much better to be able to put down more and get a lower rate. We've used some of our savings as well as our ever-shrinking equity. I think it's quite a good time to trade up, as you're getting more for your money. The house we are buying would have been out of our reach even last year.

Worth checking if your existing lender will offer a good deal if you stay with them.

RBS has offered us 3.85 per cent on a re-mortgage but we do have equity 1.5 x the amount of the mortgage, even on a very conservative estimate of current values (less than other houses in our road have gone for this year - I'm VERY cautious about borrowing money).

There are buyers around but presumably it depends on the local market. A house in our road has just gone to sealed bids between eight buyers!

(And it's really grotty, estate agent admits it needs £20 to £30k spending on it.)

Friends of ours have just bought their Forever House. They haven't sold their old one (re-mortgaged and offering for rent).

Well, we had ours valued and whilst we could make the stretch with interest rates as they are at the moment, we would struggle if they nudged upwards again. So not for us this time, but we feel re-energised about where we live now, so a useful exercise all in all .

Thanks for all your advice.