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'Stretch yourself' - why?

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  • shortcrust
    shortcrust Posts: 2,697 Forumite
    Eighth Anniversary 1,000 Posts Combo Breaker Newshound!
    My advice would be to buy the best house - measured against your requirements - you can find within your budget. That's not the same as 'stretch yourself' but I'd guess that's what people are really trying to say.

    Not buying a house you love for 150k because you can afford to pay 180k would be crazy.
  • I bought my first house 5 years ago, aged 31 & on my own. I originally looked for a house that needed no work, but these would have stretched my future budgets further than I was comfortable with.
    I bought a typical first home - 2up/2down type terrace in a Northern city for £100k. It needed a fair bit of work, but crucially it was in an area I was happy to live in & I could easily afford the 25% deposit & money for the work to be done out of my £50k savings. I then spent £15k fixing it up - new lounge floor, new roof, updated bathroom suite, new carpets &, of course, all furniture & white goods(I had none as a FTB). A year in I also had some of the garden landscaped & a new boiler put in. The same house in a good state would have been about £115k, so little difference there.

    If I'd stretched to a higher mortgage I would only have been able to afford a done up but identical house in the same area. & I didn't want to live in an area that was cheaper, but not a nice place. In the long run, I've saved interest on the £15k it took to do the building work as opposed to having it on the mortgage.

    5 years later my house was valued at £133k & my LTV around 45% with very comfortable mortgage payments. I've also been on the lowest rates as I had a 25% deposit & 50% LTV when arranging my 5 years fixed rates. & Importantly, I'm happy here - the area has gone from not fantastic but not awful to desirable & "up&coming/gentrified". I got lucky - the same street now houses selling within a week for £135k+.

    I've recently looked at houses on Rightmove & have concluded that if I wanted to move I could only realistically afford the type of house & area I'm already in but with a higher level of debt! I'm just fortune I'm not encumbered by a large mortgage.
    My only want is a more private garden, but I could fix that with a new fence rather than a new house.

    & Most importantly, not having a huge mortgage liability meant I could quit my previous stressful job that I hated for a job I love, but on less money. I've had to learn to live with less spending money, but I've a life I'm happy with now & that's priceless! Spending my 20's in an awful but well paid job saving every penny has now paid off in my 30's.
  • ProDave
    ProDave Posts: 3,785 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper Combo Breaker
    A better idea might be, when looking for that £150K house, choose one that has potential to extend, e.g a semi detached with a lot of garden to the side or back of it, so as your needs increase you can enlarge the one you have rather than move. Also consider if the present layout lends itself to extension without a lot of re work if what is there, again e.g a semi detached where the stairs and front door are at the side of the end wall is best.
  • Skippy13
    Skippy13 Posts: 206 Forumite
    Part of the Furniture 100 Posts
    We regret not stretching ourselves. We looked at a house that needed a lot of work doing to it, some of which was essential and some just cosmetic. We decided against stretching ourselves and so didn't buy it, whereas with hindsight we should have done, factored in the essential work and worried about the cosmetic work later.

    We ended up buying a one bed maisonette for £35k less instead of a two bedroom house and we're still here with no way of moving. While we like it here, we often think we could have had a house with our own drive!
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Inflation also reduces the relative cost of debt, most younger people in the early stages of career will see increases in income.

    Stretching does not have to mean bigger payment taking longer term with the intention to increase payments when the finances ease.

    As has been said if investing the cost of a move now can get you into a bigger better place do it.
  • DD265
    DD265 Posts: 2,223 Forumite
    Part of the Furniture 1,000 Posts Homepage Hero Name Dropper
    Some great points on here thank you!

    We're looking for a 3-bed semi or detached with scope to extend. What we're looking for is doable on the lower budget of £150k (though obviously we get more choice with £180k or higher), it's just a case of narrowing down the wont touch/can live with/must haves.
  • sheepy21
    sheepy21 Posts: 221 Forumite
    We decided to stretch ourselves. Looked at two houses on same development. One was 190k, refurbished five years ago but was looking tired and needed work. Second house (which we’re now living in) was 199k brand new full refurb, new heating system and nice position in general. Was well worth the extra 9k as it would’ve cost us far more at the other house to get the same quality and we’d have hadn’t the stress of having people in doing work!
  • dawyldthing
    dawyldthing Posts: 3,438 Forumite
    DD265 wrote: »
    Thanks all. Those reasons do seem valid and I can understand why we should consider it as an approach.

    Our plan is already geared towards the long term rather than a 'starter home', it's just the £150k properties typically look like they need new kitchens/bathrooms whereas the £180k properties generally appear to have been done recently. So any money we're saving initially on mortgage repayments is more likely to be ploughed into improvements - another consideration.

    Definitely some food for thought, and cause to spend more time looking at different numbers. :)

    You could always go for the £150k and just do it all yourself/ gradually. I’ve been here 6 years, not got a new bathroom or kitchen but it still functions
    :T:T :beer: :beer::beer::beer: to the lil one :) :beer::beer::beer:
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    if brave throw up a post code near(ish) where you are looking and see what people can find say with an £200k upper limit.

    There are a few here with a very good eye for properties with potential.
  • zagubov
    zagubov Posts: 17,938 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    In London, loads of people I know need to buy a property big enough to take at least one lodger and use the income to prepare for children (so they already have the rooms).

    Having said that they often have multiple jobs and many people only buy with another wage-earner.

    Studio flats are an easy step to miss out going up the local housing ladder. Two-room flats/ maisonettes or even small gardenless terraced houses are what people aspire to.
    There is no honour to be had in not knowing a thing that can be known - Danny Baker
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