Buy the most you can afford?

neilio

My end of terrace, new build, 4-bed, in the southeast (M25 corridor) was £670K. It still shocks me when I find out how much less it would cost elsewhere in the country.

Greyhorse, my other bit of advice is that, assuming you are of a certain age with lots of potential for promotion at work, is that you'll soon realise with a bigger mortgage how much money you will want to make and what you will and will not accept when it comes to new job offers and pay rises. Go for the bigger house, then work to get ahead in your career. Not knowing anything about you, I'm not commenting on how driven you may or may not be at work, but it will give you a thrust for sure and you'll get ahead even further.

cyantist

If you'd be getting an extra room would you consider a lodger to help, at least temporarily? Would you find one easily where you live?

This is what we had to do, but working in London buying somewhere that wasn't at the absolute maximum of what we could afford wasn't an option.

Otherwise, I agree with other posters who have said a mortgage of £1000 with income of £2600 is pushing it. Would they even approve you for that much? Our income was about £4400 when we bought (no kids, no other debt of any kind) and they said the maximum mortgage we could have was £1400 a month and there was only one lender who would even go that high

Cakeguts

If you have never been really really short of money then this is probably a bad idea. Most arguments are about money. It will be fine until one of you decides that they want to spend some money that you haven't got on something that the other one doesn't agree with. Much better to have some spare cash.

Marvel1

If I borrowed the maximum I could borrow for a better house, I think I would struggle if/when interest rates went up.


I'm on my own, so there is no second income.


Right now as rates dropped paying £197.00

Greyhorse

We already have children. The income is based on me working part time.
If we were to struggle I could go back full time however childcare would then be required.

The reason we wanted the 4 bed is so we could have a home office as my husband works from home so bedroom for us, one for each child and an office although we could live without one. I also have large dogs which I compete with and could do with the extra garden space! I also would prefer a detached due to the dogs barking and causing problems with neighbors although these are issues that haven't happened yet. There's nothing to say we won't be equally as happy in the semi.

I would be worried about resale and selling in say 5-10 years time but I have no idea what we will be doing that far in advance.

We were approved for a mortgage up to the value of £300k via a broker- god knows how! We have a joint income of 50k on paper but take home means we have around £2600 after tax and pension.

It's really interesting to read everyone's view points. Husband is in the buy the cheaper house and live comfortably camp whereas I would be the one trying to push for more. Then again he is sensible and I am a risk taker!
I think we will most definitely go with the cheaper house though.

ANGLICANPAT

In such an uncertain market, Id not relish paying mortgage interest on a property that could end up in negative equity (especially if rates rise) , so Id keep my mortage as low as possible ie a three bedder, but Id make sure I loved it, and essentially, that it had the potential to build up or out or both, in the future when I felt times were more certain.

I see you have children, (crossed post) so a 3 bedder a bit more difficult but not impossible with the right one.( we have a 3 bed with a pretty large main bedroom with 2 windows which could easily have a studded wall put in temporarily to give each child a space for instance ) A good long garden would help out with dogs , with space to build a decent outhouse type thing for them to go after muddy walks and stuff , to relieve pressure in the house for a short time. Also in a large garden theres the potential to spend a couple of grand for a log cabin as an office.

kilby_007

Ithaca wrote: »

If rates do go up they will go up slowly, half a percent at a time which gives you time to adjust. There are too many people who would be in dire straits for the Govt to risk raising interest rates to high too quickly (IMO).

What makes you think rates won't go up quickly in response to some other economic factor? Housing isn't the only thing affected by/affecting interest rates. If people haven't factored in interest rate rises then I'm sorry but they made their bed! It's not everyone else's responsibility to make up for it...

GoldenShadow

OP's % isn't far above ours. I have older friends paying more and earning less. Lots have 35 year mortgages too. I'm definitely not uncomfortable with our proportion. We wouldn't own a home in our area if we were going below 30% I'd take home.

glasgowdan

I'd feel uncomfy paying a £1k mortgage on £2600 take home, but it's not an unreasonable amount. I actually think it's quite a normal mortgage. I assume that's a rate of around 3.5%? If the rate goes up to 6% it could go up to £1300, which although hard, wouldn't see you out on the street.

BUT, if one of you became ill, couldn't work, redundant, then there'd be problems.

We bought at a level that either of us could still pay the bills. Our mortgage is now less than our first house when we bought it. We've gone from paying 25% of our net income on the mortgage to 12%, and it feels much better.

How about a 3-bed with suitable space and layout for a future extension? Granted, this would be a lot of upheaval with kids.

Greyhorse

Thank you Glasgow.

Our outgoings are perhaps higher than some people hence it would be tight for us. If we sold our cars and got cheaper ones/payed off our loan then it would probably be quite affordable.

I do think perhaps it would be better for the children if we had more spare money though to be able to take them out and pay for trips etc rather than being stuck in.

It's just a shame as the 4 bed is a lovely house, if only it came up in 5 years time!!