Better house or greater financial freedom?

osian

Ahh!! I'm so confused.

Basically, we are a couple in our early 30's (no kids yet) and live in a 3 bed house which is perfectly adequate for our needs and has been for the past 8 years. We have enough in savings to pay the mortgage off outright, plus about £13K left over and currently save about £1k every month also. We haven't paid it off yet as savings are currently tax free (I'm a student) and at a higher rate than the mortgage.

It is a nice position to be in and we feel fairly secure but don't like to take things for granted. Hopefully in the future if we save for a few more years and pay the house off we will have a lot more options open to us (particularly with my husband's work eg. early retirement, PT hours, go freelance etc).

The only thing is we have fancied the house behind us. In the estate agent's brochure it looks gorgeous, it is a huge town house with 5 bedrooms in a good location. I am planning to start a small business from home this year so the extra room would come in useful. It is on the market for £54K over the market value of our house, so if we were to buy it we would trade in our house and savings and require a mortgage of at least £41K plus all the associated moving costs. I know it is not a large amount and would be easily affordable for us but it would put us back a few years financially IYSWIM. I am also aware that bills will be higher in a bigger house, so less money will be saved monthly.

We have not been to see it yet and I'm not sure whether we should. I don't want to fall in love with it and then not buy it. But in the same vein, I don't want to fall in love with it, buy it and then regret throwing away our potential financial freedom.

My husband says to wait a while as in a few years we could save enough to buy a similar house outright, house prices may come down, etc. My thoughts are that we have saved hard to get to this stage and if we bought this house we would be starting all over again. Even though these are logical statements, the house is calling us. Of course, we may view it and hate it too.

I really don't know whether to go and see it or not - I'm confused . I feel like we are being greedy when the house we have got is perfectly fine. What would you do?

Sorry for the long post .

Daft_Pegasus

You might visit the house and hate it - your decision is then made for you.

I would go and view the house - if you love it then you have a decision to make.

belfastgirl23

Okay I'll be honest and say this seems like a mad question

If you can afford it and really want it then longer term property will always be a good investment. To me there is no reason to keep that money tied up in savings. I know some will differ on this but personally i feel that money tied up in bricks and mortar will always hold its value over longer time frames, even if short-term it can drop a little. Also now strikes me as a good time to buy, I know here in NI property is not shifting at all which presumably means prices can be negotiated better. And the good thing is that you can always sell and down-shift if you find you want to retire in 10 years time or whatever.

But more than that, if buying this house will bring you both a lot of pleasure and facilitate you developing your interests then that alone is a good enough reason to do it, never mind the financial arguments.

the other thing is you might go to see it and hate it. The last time DH and I were considering moving there was one development we gazed longingly at for about 6 months. When we had an offer on our old place we went to see it (although it was at the very very top of our price range). Inside it was really really disappointing. The only spacious room was the basement and all of the others were really poorly designed. The kitchen was dark and cramped. You might even find this in the 'new' place.

Lots of luck anyway.

**edit** just to add a £41k mortgage when you're in your mid-30s would be most people's dream we are on more than 5 times that and it's worth every penny...

do_it_today!

Hi :hello:
I would probably want to go and see it! but if you are asking the sensible side of me.... I would wait a while for the following reasons...
house prices are due to come down
Do you really need 5 bedrooms?
Cleaning will take AGES
More space to end up cluttering up with junk
The freedom you have right now is just brilliant Id love to be in your position financially
you could work out how much it would cost to heat maintain and decorate every month and then make a more informed choice on whether it would be worth looking at it
Good luck

JonnyBravo

osian wrote: »

Ahh!! I'm so confused...... (snip)


We have not been to see it yet and I'm not sure whether we should. I don't want to fall in love with it and then not buy it. But in the same vein, I don't want to fall in love with it, buy it and then regret throwing away our potential financial freedom.

My husband says to wait a while as in a few years we could save enough to buy a similar house outright, house prices may come down, etc. My thoughts are that we have saved hard to get to this stage and if we bought this house we would be starting all over again. Even though these are logical statements, the house is calling us. Of course, we may view it and hate it too.

I really don't know whether to go and see it or not - I'm confused . I feel like we are being greedy when the house we have got is perfectly fine. What would you do?

Sorry for the long post .

Well its a judgment call isnt it. You could do either and not worry with your debt levels realistically.

An extra 50k mortgage is not much when you're technically mortgage free.

Do you really want THAT house is the crux of the matter?
It could come down in price in the future but it might not come up for sale again. Do you want THAT house or will a similar house do?
It sounds like you've got at least one more move in you to get your "keeper"... perhaps cos the one you're in isn't ideal for kids?


For what it's worth we were in an identical situation two years ago.... we'd be mortgage free by now.... but the mrs saw a house she liked down the road..... talked me into it..... best decision we've ever made. Much building work later we have a large mortgage again but a fab house that's our "keeper".... well for at least the next 10 yrs til the kids have left!


Go see it!

silvercar

We did the same, just as we got to the point where we could be mortgage free we decided to move!

Don't regret it at all though the mortgage free date has been pushed way back.

The only thing I would say is that downstairs rooms can always have a purpose but I notice the empty bedrooms and I've got 2 kids.

chappers

you seem to be quite sensible people and if you can throw £1000 at a £41K mortgage you'll have it paid off in 5 years.

MissKJ

GO FOR IT. If you like it, you have to have it. i have two nippers, but I sooooo wish I had more than 3 bedrooms. Parents stay sometimes when i am working early, the sleeping arrangements are difficult, mty OH snores, and I wish I had a spare room, kids are sick and some one has to get up for work, why both be tired?????

Then working from home/ homework rooms, you can't really have TOO MUCH space when you have got kids. Then they have friend for sleep overs, should I go on????

You can't beat a big, noisy, loving, busy home when you have a family. For that you need space.

Best of luck, you can afford it.

donstermonster

book an appointment tomorrow, if you want it , get it - whata tiny mortgage

buy it whilst decisions are easy to make - go on do it

excited for you !!!

belfastgirl23

I should add though that you probably need to figure out which will give you greatest pleasure/happiness - having the bigger house or having the money in savings? My response was based on the fact that i would have the house in a heartbeat but it's different for everyone

allycat999

Go see the house if you love it go for it, we are doing just that we have been mortgage free for 5 years, kids are now at school and I have a job I love with a contract that states i only work when the kids are at school (I know I am extremely lucky) so we are trading up to a seven bedroom house, this is our last move (hopefully) until we do the downsize to a bungalow!!