What to do??

achiddas

Need some advice please, I will try to keep it as simple as poss.

Myself 29, and wife 30 have an outstanding mortgage of 120k, interest rate at 1.49%, on a small 2 bedroom terrace, 15k in savings, combined gross income of 58k, 2 children aged 4 and 20 months and have been trying to sell the house for a year, on the market at 139k, ( reason for sale is the wife thinks its too small, I personally think its big enough while the kids are this young). Had plenty of interest but no offer to date.

The in-laws have offered to buy our property for 130k and the wife has her heart set on a 3 bedroom semi in the same town for 175k.(needs some serious investment over the next few years, it really is a room by room job to bring it up to date) It is very good of them to offer as they have wanted an investment property for some time but im not sure whether to accept it. Santander have told us they will not loan us the extra money to move, so it means shopping around for a new deal and 10% deposit deals are not good value at present. My point to the wife is while our rate is low, save like crazy ( in excess of £1000 a month at present) and in a couple of years we will have a sizeable pot to move on with............ she thinks im nuts and really wants that house.......am i thinking logically???

sheslookinhot

Yes, you are, maybe it's the wife who has become "illogical". This can happen to anyone when their heart is set on a move.

Hosue prices are not going anywhere soon, they may even fall.
So save for a year or more then see what's available.

As you say, while the kids are that young no need to be "chasing the dream"

Jessikita1983

achiddas wrote: »

Need some advice please, I will try to keep it as simple as poss.

Myself 29, and wife 30 have an outstanding mortgage of 120k, interest rate at 1.49%, on a small 2 bedroom terrace, 15k in savings, combined gross income of 58k, 2 children aged 4 and 20 months and have been trying to sell the house for a year, on the market at 139k, ( reason for sale is the wife thinks its too small, I personally think its big enough while the kids are this young). Had plenty of interest but no offer to date.

The in-laws have offered to buy our property for 130k and the wife has her heart set on a 3 bedroom semi in the same town for 175k.(needs some serious investment over the next few years, it really is a room by room job to bring it up to date) It is very good of them to offer as they have wanted an investment property for some time but im not sure whether to accept it. Santander have told us they will not loan us the extra money to move, so it means shopping around for a new deal and 10% deposit deals are not good value at present. My point to the wife is while our rate is low, save like crazy ( in excess of £1000 a month at present) and in a couple of years we will have a sizeable pot to move on with............ she thinks im nuts and really wants that house.......am i thinking logically???

I think you are very sensible to strive for wHat you want, taking a long term view.

I understand why your wife would love more space though! However, speaking from personal experience, I would rather be in a smaller ok house than live around a building site for a good few years with two small kiddies, trying to live around the work (even if it is only comestic). I am 2 rooms away from finsihing my house and it is doing my head in, living around it!

Would it be worth you overpaying your mortgage rather than saving? Sorry if that is patronising, I am sure as a fan of this website you have been all through this, but £15k is a hefty chunk to reduce it by and so would overpaying by a grand a month? Or are your savings better off where they are?

MFSaver

Is this three bedroom semi large enough for the family in 5-10 years time? Does your wife envisage the next house being the forever home? If yes to both, it might be worth buying the new place. If no, I would personally save more money to build a deposit and get a larger place in future.

achiddas

Have looked into overpaying ( and im not patronised in anyway Jessikta) but I was thinking if we were looking at moving the liquid cash would be more useful than tied in equity! Savings sat in our isas at present and our mortgage is a comfortable £570pm. Maybe I should rethink this strategy. Our other plan was maybe get enough saved in cash over the next 2 years and then buy a second property and let our first house and keep as a nestegg????

achiddas

Its definitely big enough for years to come ( 1920s, Vaulted ceilings, Massive rooms etc) and it would definitely be a forever house, but its the massive jump in mortgage payments that i cant get my head around. Basically need to borrow another 35k to make the move happen and it means anothe £300-400pm, whereas another 2 years of saving and the rates would be much more favourable...........as you can tell I am a slow and steady saver and the missus is a have it now borrower, but hey opposites attract!!!!

Jessikita1983

achiddas wrote: »

Have looked into overpaying ( and im not patronised in anyway Jessikta) but I was thinking if we were looking at moving the liquid cash would be more useful than tied in equity! Savings sat in our isas at present and our mortgage is a comfortable £570pm. Maybe I should rethink this strategy. Our other plan was maybe get enough saved in cash over the next 2 years and then buy a second property and let our first house and keep as a nestegg????

On the mortgage calculator I think, there is a great tool called "overpay versus saving" might be worth tapping your figures in there? I would agree in keeping £5k in cash for a contingency fund to pay for solicitors etc, but you may be better long term overpaying than saving.

Your other plan is very similar to mine. I am working on paying my mortgage off my current home, to move to a "forever home" but keeping this house and renting it out.

Personally, I wouldn't move, work towards the above paragraph situation to secure your long term future.

All that would be my suggestion is, you do investigate the calculator as you may be better off overpaying your mortgage.

You sound very switched on with money and very sensible attitude towards money. I wish you well with whichever route you decide.

dimbo61

If you sell to your in-laws after you have paid costs legals,searches,surveys ETC you will be lucky to have a 10% deposit and a £155,000 mortgage at a much higher rate than you are paying now so for now stay where you are and overpay/save ( which ever pays the higher rate )