Worth going for a bigger mortgage - first time buyer

chunkytfg

Buy the bigger one without help to buy would be my way of looking at it.

Yes new builds drop in price initially but long term you'll increase the possibility of seeing the initial outlay back.

Plus being a larger home it your more likely stay in it for longer and not outgrow it by adding kids/pets into your life.

18k down would mean a 95% LTV mortgage which wouldn't get you such good rates but fix for a couple of years, do all the overtime and extra work you can both manage and batter the overpayments as much as you can and then when you remortgage at the end of the 2 years you should have the 10% needed to get into the more normal interest rates offered by a larger section of the lending market.

PasturesNew

davidw123 wrote: »

20K more gets you a detached home, integral garage and utility room.
The cheaper, despite only being 20K offers no gargage, no utility and is a semi.

As you've spotted.... you get so much for for just that £20k. Bl00dy annoying for those who can only just reach the lower figure!!!

ALWAYS go for "the most" you can afford, especially when you're younger and if you're not over-stretching.

A semi can never be detached.... although you could build on a utility and a garage at less than £20k, the real "perceived value" is the detached bit, which "money can't buy"

18 months ago some new builds were built near me. 18 months later, in this "strange/slow market" Zoopla now "values" them as higher than they were bought for (it did show a drop in price for the first 10 months or so, then it went up again).

EDIT: Oh, hang on, just checked again and they're under the price paid now

CM66

I'd absolutely go for the more expensive one if its more affordable....


I had the same dilemma 10 years ago, i was looking at 2 bed flats around the £175 mark and on visiting the site office noticed they were selling 4 bed townhouses for £220k


I managed to negotiate it down to £195 (so ended up with a £175k mortgage like you would)



I've been here 10 years and its the best thing i did.... i think i probably would have moved already had i got the flat.


Plus my house has increased by almost £100k while the flats are still selling for pretty much the same as they were

99bottles

Not all new build drop in price. On My estate detached houses prices have increased. A house bought in Jan 2014 for 191k sold last December for 243k. Most detached houses have increased by average couple of £k per year. The terraced have gone down though.

hazyjo

99bottles wrote: »

Not all new build drop in price. On My estate detached houses prices have increased. A house bought in Jan 2014 for 191k sold last December for 243k. Most detached houses have increased by average couple of £k per year. The terraced have gone down though.

Probably more to do with a lucky massive market rise for them. I bet it didn't rise as much as 'second hand' houses in the area. My house price (not new) nearly doubled from 2013-2017.

Socajam

Also worth noting the bigger house comes with flooring, appliances built in

This always gets me: do you realize that if the mortgage is for say 25 years, that means you will be paying for the appliances for that time as they are tied to the mortgage
Is there anyway, you can ask them to leave out the appliances?
I would say go for the bigger house, but bear in mind that the first 5 years are the hardest time you will have. I would sit down and write down everything that I spent money on, differentiate between a "want" and a "need" and cut where necessary.
Get rid of any cc debt that you have and learn to live like you are extremely poor. 5 years will do really fast.
Put all pay rise into a life happens and emergency fund.
Cook enough food and take your lunch to work - huge savings here. You can save up the lunch money for a date night, after all both of you will need some night life.
It can be done, but go into this with your eyes wide open and you should succeed - good luck.

phillw

Socajam wrote: »

Is there anyway, you can ask them to leave out the appliances?

Bigger home, appliances, only 20k more, maybe a show home?

Houses are a lottery, some are poorly made while others are great. Certainly get the biggest you can afford and live on air. Just try not to buy a lemon.

Kat88

Mine (new build) also increased in three years by £30k (12%) so it all depends on the local housing situation. I wouldn’t say second hand homes here have changed any differently so you can’t tarnish new builds with the same brush. We were in a similar position to you OP a few years ago and id say go for the bigger house, like we did, the return has definitely been better and we’ve been happier being detached and having that extra space. I’d echo not using help to buy if you can, but likewise if you need it do not fear, I’ve heard of no one having problems remortgaging after 5 years.

I would say the builder does make s big difference when coming to resale. For instance persimmon struggle to sell initially let alone second hand where I am so be mindful of that.

kates08

With stamp duty, solicitors fees, EA fees and removals it cost us over £10k to move house last year. If the more expensive house means you wouldn't have to think about moving in 5-10 years then I would definitely choose that one.