FTB - How to 'allocate' savings

TT1_3

The OH and i are 1st time buyers with no debt and ~50k saved.
We're buying a 4b detached at 225k that has very large gardens and room for an extension, which we'd like to build (i've already 'desiged' it on google sketch, lol :beer: ).

We'll need to spend -
26k = 10% deposit +conveyancing +fees etc
8.5k = furnising + doing a few minor jobs that need doing (this includes 2.5k for the sofa that has 4 years intrest free credit)

After ALL monthly/annual outgoings have been paid (these were all over estimated) we'll have ~£1300 a month left.
So baring all this in mind, the question is, how would you spend the 18k we have left?
Save it for the extention (i'm guesstimating 20k for the extention)? Borrow less on the morgage? Leave it in the ISA for a rainy day? Other?

Thanks in advance for your ideas.

Doozergirl

Borrow less on the mortgage and save up for the eventual extension.

£2500 on a sofa?

Kez100

Same here. I would buy the house with the minimum of mortgage. I'd secure a mortgage where I could overpay but also draw on overpayments later. Once in, I would overpay, and once I had saved enough to finance the extension I would decide if, indeed, it was necessary and then build - drawing on the overpayment credits.

Often once you live in a place you want different things. I've known two people design their own self build homes and still wish they had done it differently when they moved in and lived there a year!

Also, all of this means if I faced a change of circumstances (babies, redundancy, loss of overtime...loads of reasons) I would have been as prudent as possible.

I cannot believe you are considering paying 2.5k on a sofa - most of that is rolled up interest (interest free isn't - it's hidden in the price somewhere!). We have two beautiful three seater sofas from Next and they cost (£990 total). You have saved well but you seem to now be in overspend mode. Try and rein it in; that would be my advice.

PasturesNew

£8.5k on furnishings seems a bit ott.

As it's your first home I'd suggest buying very little at first. Really settle in with the minimum and as you live in the space you'll change your mind on what you want around you.

£2,500 on a sofa is way OTT too... that's what you'd spend on a sofa once you know what you want from one. Maybe on your 2nd-3rd house. When you know you're in your house for life and won't be moving. Moving things tends to damage/degrade them.

I'd settle for a cheaper sofa that it was more fun to enjoy. Snuggle up on it, eat a takeaway on it, drink things while sat on it ... all without fear of spillage!

PasturesNew

Also, the extension might cost you £20k, but that's probably the bare build. You'd still have to decorate/carpet/furnish it. I'd budget £35k.

But why do you need an extension? And so soon?

If council tax were to get rebanded you might find yourself in the next bracket up. Then there's the additional maintenance and heating. And if there's only 2 of you, you've spent a shed load of hard cash on "things" that just sit in another room you're probably not using.

You sound like a script from a property !!!!!! programme.
Turn the TV off, move into your minimally-furnished, minimally-mortgaged property and LIVE in it for a few years to get the feel for the space and how you will really live in it.

[Deleted User]

I have a 2 and a half grand sofa.. it's really nice!

Anyhoo, buy as much of the house as you can.. then save for a bit longer and if you really need to, extend your mortgage to give you the extra cash to do the extension.

Kez100

ringo_24601 wrote: »

I have a 2 and a half grand sofa.. it's really nice!

Anyhoo, buy as much of the house as you can.. then save for a bit longer and if you really need to, extend your mortgage to give you the extra cash to do the extension.

I have two for 990 .... they are really nice too!

TT1_3

LOL, though the sofa would get mentioned, its 2x 3 seater and a big storage footstool.
Its a lot more than others we saw (we went around all the sofa companys) but its in another league comfort wise when we sat on it, it really was head and shoulders above anything else...you'll have to trust me on that, lol.

We're definately not in overspend mode, its daunting buying for the first time so thats keeping the moths in the wallet.
I've seen a mortgage that has no lock in period, no exit fees or overpayment charges. I'll have to look into drawing on the overpayments bit, i didn't know some offered that.
We were going to wait until next year for the extention, we'll need planning permission so won't have time to move, get that and then build before winter and i don't want it built then.
I'm suprised you didn't think keeping some for a rainy day was a good idea.

[Deleted User]

Sigh.. sadly 225k only buys you a terrace house in my neck of the woods...

My sofa is overly expensive because of the super high quality leather. It was a present from the in-laws.. i don't think i'd ever spend that much on a sofa

ziknik

How secure are your jobs? How secure will they be when we are in recession?

I don’t have a secure job so I would keep the £18k as an emergency fund in ISAs/ Cash Savings.

PasturesNew

ringo_24601 wrote: »

Sigh.. sadly 225k only buys you a terrace house in my neck of the woods...

If you hadn't bought that sofa you could have moved!

ringo_24601 wrote: »

My sofa is overly expensive because of the super high quality leather. It was a present from the in-laws.. i don't think i'd ever spend that much on a sofa

Leather farts.
I'd not have leather.
Too embarrassing when the vicar comes to tea!