Mortgage/Moving Advice Please

benson1980

Kids are a bit of a double whammy when it comes to finances. Without knowing exactly your personal circumstances, we have a similar income with my other half working part time. Two kids, with one of us working FT and the other PT is seriously hard work. I personally don't know anyone who has kids, where both people work FT. Sure it's doable but would be grief, unless you have family willing to help out a lot.

Plus, they are expensive with childcare etc.

Not wishing to put a downer on things. If we were child free I would estimate with both of us being able to work FT, we'd have around £1500 extra disposable income. But wheres the fun in that.

Just perhaps something to consider in terms of income to mortgage ratio in the future if this is your plan. I'd agree with blitzing the saving and having a sizeable amount to put down on the next house. This is what we did.

Bristol80

GoingOn30 wrote: »

A child doesn't really need much space for the first year and if you're not already pregnant that could be 21 months away or more, so why not start your family in your current place and use the next 6-12 months to overpay your current mortgage/save towards a deposit. You need to start putting away some more of your hefty disposable income to know whether you're happy to live that lifestyle in order to get the bigger house.
Getting to 15% deposit before you move on would help protect you against the risk of prices falling and looks perfectly achievable in only a few months if you reign in your spending.

Thats the thing though, we already put away a considerable amount of our disposable income (wedding saving). We are used to living a mostly frugal lifestyle.

In terms of absolute numbers, because of my latest pay rise, and timing of old financial commitments ending....the new mortgage as of now if we moved at say £1250pm actually gives us MORE disposable income than a month ago, bizarrely (increase of c. £500 on the mortgage payment but offset by £400 of financial commitments ending (car loan etc) and £200/m pay rise.

So if we moved we!!!8217;d still have more disposable income than we!!!8217;ve ever had. I see the argument for saving that as cash but isn!!!8217;t it sensible to get into the best place you can afford as soon as you can do it?

Whats the point in saving/overpaying £25k in 2 years only to find the equivalent move now requires another £40k of borrowing because the prices have gone up? Not saying they will just rambling aloud really. Not an easy decision.

benson1980

The size of the potential mortgage looks quite big to me. Looking again at your numbers, and age/term of mortgage and thinking about kids etc we were in an almost identical position but we’re five years further down the road.

I can only say what worked well for us

We had around 65k equity in our house, looking for a bigger house to start a family. I put myself out to earn as much as I could, and got around 40k of savings together in two years. We bought a dump for 267k adding 70k to our mortgage. With just one kid at the time I could do it up whilst living in it, and now we have a house worth 390 to 400k with a 134k mortgage. Granted we rode the wave of significant house price rises in 2015 which it looks like you’ve also benefited from.

Personally if you are planning on taking the financial hit of kids that looks a hefty mortgage commitment to me, unless you’re pretty confident that your pay is going to go up over the next few years. I do however wish that we had pushed ourselves a little bit more as now we are looking for somewhere bigger. But nowhere near a 300k mortgage even though the online calculators say up to 350k.

This is just us though. If prices go up so will the value of your house.

Bristol80

benson1980 wrote: »

The size of the potential mortgage looks quite big to me. Looking again at your numbers, and age/term of mortgage and thinking about kids etc we were in an almost identical position but we!!!8217;re five years further down the road.

I can only say what worked well for us

We had around 65k equity in our house, looking for a bigger house to start a family. I put myself out to earn as much as I could, and got around 40k of savings together in two years. We bought a dump for 267k adding 70k to our mortgage. With just one kid at the time I could do it up whilst living in it, and now we have a house worth 390 to 400k with a 134k mortgage. Granted we rode the wave of significant house price rises in 2015 which it looks like you!!!8217;ve also benefited from.

Personally if you are planning on taking the financial hit of kids that looks a hefty mortgage commitment to me, unless you!!!8217;re pretty confident that your pay is going to go up over the next few years. I do however wish that we had pushed ourselves a little bit more as now we are looking for somewhere bigger. But nowhere near a 300k mortgage even though the online calculators say up to 350k.

This is just us though. If prices go up so will the value of your house.

Thanks for that. I!!!8217;m confident in maintaining my salary - I!!!8217;m lucky in that my company always has good pay rises and I!!!8217;m pushing for a regrade of my role which will be a big part of the decision as to whether we stay or go.

Part of me really wants to stay and get mortgage free earlier etc, but the numbers man in me says the money is better off long term in a house than sat in a bank and although we may have a few years of having to be extra frugal, we!!!8217;d be in a place we!!!8217;d be happy to be for 20-25 years through raising a family without ever having to move to be able to accommodate a family.

It!!!8217;s a really hard one to know what to do. I!!!8217;m kicking myself for us not stretching further back in 2015 now.

Have revisited the pure numbers and this is where we are

Disaposable income as of now £2634/m
If we bought a new house with a £1250 mortgage payment would be £2,105 pm

Partner brings home £1500 net a month. On mat leave that would be what....£500/m ? So reduction to £1605/m

Is that really over stretching if we have kids? c. £1600/m for the costs of a child?

Bearing in mind that having a child is likely to be at least 2-3 years away which would give us plenty of time to save some cash for the early few years of pain (paying for childcare etc)