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Hi all, I am 24 and my partner and I are looking to buy a house this year. We have approximately 70k saved for a deposit and including this could afford a property in the region of 350k.
In the areas we are looking for 350k we could stretch to a 3/4 bed detached house which we wouldn’t foresee ‘growing’ out of, however it would mean maxing out the mortgage and high monthky payments. Or for 250k we could get a 2/3 bed semi which would be perfectly reasonable for now especially as a first house but will never be the ‘dream’.
Now I know this is down to personal opinion but wanted to hear other people’s experience. Maxed out mortgage and regretted being financially burdened? Got your dream house and don’t regret it for a minute?
Thanks in advance!
If you go for the £350k house and interest rates go to 6 or 7%, can you still afford it ? what about 10% ?
Rates are very low currently, they may not stay there.
Also consider that if you go for the 250k house you could overpay as and when you can afford it. This will reduce the amount of interest you pay overall.
Just about selling our first house and moving on to our second.
We maxed out our mortgage for the first place and within a year I was regretting it. I was of the mindset that it's an investment and we should get the most we can afford at the time.
We're now downsizing to sonething more realistic for a better quality of life, savings, holidays, treats. Has been an expensive lesson but I'm glad we're doing it.
Don't over stretch yourself… Live within your means and you'll be far happier as a result. That's my opinion now anyway.
Some other things to consider…
Lets say you max out your affordability now.
What may appear to be your "dream home" may actually turn out not to be after you've lived there for a year or two. You notice the soundproofing is quite shit, the layout isn't quite right, there's nowhere for the kids to run safely, the nearest school isn't very good (check ofsted), work changes, you get an offer of a better job in another county etc etc etc.
Ok, now back to the maxxed out scenario. What if that house doesn't end up being the right house for your future in any of the above scenarios?
Now let's throw in a curveball…
Brexit causes the housing market to go to shit. Suddenly you're mortgaged to the hilt, in negative equity, and are well and truly stuck in a house that isn't working for you.
My concerns are as follows:
TL;DR – You are young. Honestly, you have no idea what kind of house would be suitable for you years down the line. The bills alone will be a huge difference between a 2/3 semi and a 3/4 detached. Council tax will be higher. Repairs will be more costly. Throw in the fact that no one has any clue about what the economy is doing… I think maxxing out would be a very bad idea.
Play it safer for now, ride the waves for now. Christ knows where the economy/housing market will be in the near future.