Second time buyers, moving for schooling - stretch ourselves or be conservative?

Docefc

I won't bore you with the life story but 3 years ago a surprise pregnancy meant my now wife and I needed to stop living the highlife and get a house real quick. With no savings to speak of we managed to scrimp together (as well as a small family loan now paid back) £10k deposit for a lovely little £100k family home in a not so nice area. However, now with our little man coming up to three we decided now is the time to start looking to move, my wife is a primary school teacher and is adamant he's not going to the school in our catchment area, which is fair enough. 

• So we put our house on market at £115k and it was snapped up by the first viewer. 
• So we're left with, after fees about £25k deposit, we have £3k of credit card that I'd like to clear with that.
• The dream area we'd ideally like to move to, you're talking £200-250k for what we need. There is a house we love for £220k on market that needs about £8k spent to get it up to scratch. 
• Today our mortgage adviser said that Accord have a 90% LTV offer back online 2 years at 3.96%
• Now when I run the maths, we'd be fine with a mortgage repayment of about £850 a month, there's a house we like in that price range so it is a no brainer right?
• Except there's a huge caveat, we've just had our 2nd and stat maternity pay is about to kick in meaning at £850 a month we'll be left with about £200 a month in our budget in the hope that nothing goes wrong and come the end of the 9 months stat pay, my wife will probably wait until September to start work again. Meaning there's going to be a three month period of being in the red. 

What I can't figure out is if that three month of pain is worth it in the future or if we need to totally re-asses the area or not. Does anyone have any experience of going through this and therefore advice?

Thanks

yksi

Whose maths did you run - yours or the lender's? I would personally err on less-risky, even if that means you buy a smaller, less pretty or slightly different area home. Covid means nothing is guaranteed and there is a world of pain out there waiting for a lot of people who think they'll be fine. Do the maths on whether you could cover six months of unemployment if your own job suddenly went into either furlough or non-existance. Unless you're a funeral director, it's hard for almost all of us to be 100% sure our jobs are secure.

(Coming from an "essential worker" who opted to go for a cheaper property herself...)

Docefc

yksi said:

Whose maths did you run - yours or the lender's? I would personally err on less-risky, even if that means you buy a smaller, less pretty or slightly different area home. Covid means nothing is guaranteed and there is a world of pain out there waiting for a lot of people who think they'll be fine. Do the maths on whether you could cover six months of unemployment if your own job suddenly went into either furlough or non-existance. Unless you're a funeral director, it's hard for almost all of us to be 100% sure our jobs are secure.

(Coming from an "essential worker" who opted to go for a cheaper property herself...)

Thanks, it was my maths that I ran and yeah I tend to agree, schooling is the issue so may try to just see this house as another stepping stone. 

Thrugelmir

£200 a month left sounds very low.  Little room for unexpected financial outgoings. 

Docefc

Thrugelmir said:

£200 a month left sounds very low.  Little room for unexpected financial outgoings. 

Yeah this is the worry, though that is guaranteed only to be temporary as a teacher she will be returning to work and bringing another income, the 30 hours childcare will kick in for the 3 year old and the baby will go to nursery. So it will go back to being about £600