Existing home owners, your advice please...

CloudCuckooLand

Do not plan with the idea of moving to IO, when children arrive. If you cannot afford it when 1 of you is not working, then do not buy it.

Have you checked with a mortgage broker that your wife's self-employed income is sufficiently provable to be of use in a mortgage application - i.e. 3 years accounts etc.

Wait another 6-12 months, you could find prices have dropped around 10% and something that would currently go on at £290k, comes on at £260k and you negotiate it under £250k...

Catatonia

I agree with the people who are advising you against IO etc, but I think that you've also got to factor in the costs of getting a £250k which isn't right and then potentially having to move in a few years time vs getting a £300k forever home. I would tend to go for the latter if you can afford it.

DVardysShadow

lemani wrote: »

... Just as background our joint income at moment is circa £100k. My girlfriend is self employed and our earnings are 50/50. She works from home full time in an industry that is expanding. Likewise I anticipate my salary to continue to rise as I work in a growth industry too.

Then, to me, it is quite obvious. You have a prospect with a cheaper house of being able to overpay the mortgage [with the right mortgage] - or save and plough your savings in when your deal ends, etc. If you do this, it will cut a lot of slack for you later.

thebfg

we wanted to get something below 250k but we are buying for 262 instead this is because the amount of work required is dreadful. we are paying 8K stamp duty which is a pointless way of making money out of peoples futures.. i think its absurd, it should be raised to 300k stamp duty excemption for first time buyers.

but saying that the cost of repairing many of the houses we have seen would cost more than 15k alone anyway so its better to have paid that much more, and saved more in the long run, however i would say that it hit us hard as first time buyers, the governments 250k is a joke, because families cannot afford the extra amounts!

clearingout

less from a financial perspective, and more from a schooling perspective....are the £300k plus houses in good school catchments? When my now ex-husband and I bought a house we didn't have children. We bought a house with our hearts, not our heads. It was in a good catchment for the first three years of schooling. After that, it was dreadful. Had things not gone the way they had, we would have been forced to move. I don't know how we would have afforded it (because we spent as much as we could afford) but I do know we would not have had our children going to the local high school (so bad, it's now being closed down - so I guess it wouldn't have mattered!)

Essentially, then, if by buying at £300k you think you're buying yourself a family home for the rest of your lives (unforseeable, unpredictable, couldn't possibly have known that was going to happen actually happening), I would suggest doing some serious homework and working out if the area is for you long term. If it is, buying at a higher price is probably not a bad idea, particularly if it's saving you two costs of moving fees, solictiors fees etc. etc. If it isn't, buy at the lower price and move on when you're ready.

Don't under-estimate the importance of schools, school catchment and the 'right' friends when you have children. It's easy to think it'll never happen to you - it will!

pinkteapot

We bought in August and were in a similar situation. We currently earn around £120k between us, but, after getting married last June, we're thinking about kids in the next few years. We both currently have a long commute to work and we are fortunate enough to be earning high now which will put us in a position whereby MrTeapot can work locally when the kids come along and I can give up work until they are at school. This will mean our joint income will drop to around £35k when the mini Teapots arrive.

We decided to buy at around £250k but were lucky enough to get a keen seller who sold to us for £230k. We did have a large deposit which meant we only took out a mortgage for £100k. We took it out over 15 years so the capital owed is already coming down and the repayments are currently just 10% of our net monthly income. We are saving hard to have a pot to see us through the sole-income years (MrTeapot's income will cover the mortgage even with a bit of a rate rise and the other bills, this pot will be needed for disposable spends). We're going to overshoot our target for that pot so will probably throw a lump at the mortgage to get it down in the next year or so.

I do see us moving again. We got a lovely 4-bed detached so can certainly stay put for the long haul if we want (barring a crazy multiple birth scenario!) but we are in a large-ish town in order to have the good commuter links. I grew up in a small village and I'd like that environment for my kids once they're old enough to play out with their friends etc. I personally also want a more rural, quieter location at that point. Being in town suits us now with the transport links and for nights out with friends etc.

We went through exactly the same thing as you. We even viewed a house on at £325k. However, while it was clearly nicer and you could see what the extra money bought you, it was still in the town that I don't see as a long term area.

I think it's hard to imagine the impact kids have; how your priorities will change and what will matter (certainly the message I've got from people who have them!). I didn't particularly trust myself to buy a property that was going to be right for us when we are a larger family. That, combined with the area issue, meant we consciously bought a mid-term house. I reckon we'll be in it for maybe ten years. This doesn't bother me as I get itchy feet anyway if I live somewhere too long.

Don't know if that helps at all but that was our thought process when in a similar situation.

We did look at schools and our house has decent primaries nearby if we do end up staying longer than planned. We didn't bother with the secondary school reputation as that's such a long way off and schools can change drastically over that time-frame. I would move if my kids were headed for a bad school.