Would you move house with little to no savings?
Discussion
Long story short, wife and I (childless, and will remain so) fed up of living in semi next to inconsiderate people.
35 yo, 100k gross pa between us, current mortgage c. £200k/£800 mo. House probably worth £325k.
To move to a detached property we’d be looking at £500k plus.
Want to move next summer when mortgage deal ends but would have little to no savings, meaning almost all costs to be financed from the equity, meaning larger mortgage.
Would expect to have to borrow c. £375k, so probably £1,600 or so monthly payment, that’s on rough joint take home pay of £5,500. No other notable debts.
Feels like the theoretical smart thing to do is save for a couple of years so we can finance SDLT, moving costs etc out of cash and have some money to do ‘nice things’.
But with the market how it is, is that just daft as in another couple of years we could have to borrow another £50k to make the same move?
Thoughts appreciated.
35 yo, 100k gross pa between us, current mortgage c. £200k/£800 mo. House probably worth £325k.
To move to a detached property we’d be looking at £500k plus.
Want to move next summer when mortgage deal ends but would have little to no savings, meaning almost all costs to be financed from the equity, meaning larger mortgage.
Would expect to have to borrow c. £375k, so probably £1,600 or so monthly payment, that’s on rough joint take home pay of £5,500. No other notable debts.
Feels like the theoretical smart thing to do is save for a couple of years so we can finance SDLT, moving costs etc out of cash and have some money to do ‘nice things’.
But with the market how it is, is that just daft as in another couple of years we could have to borrow another £50k to make the same move?
Thoughts appreciated.
Yes I just did it as moving from a 1 bed flat with no outside space was taking its toll on my mental Heath.
You can do it with no savings, all my savings went on the deposit and then I paid around £2500 in fees for searches, pointless packs, moving company etc as I went along.
Not the easiest but we don’t live in a world where a 28 year old can save £30k for a deposit and then save another 3k for fees before that extra 3k gets swallowed up in the prices of houses going up
You can do it with no savings, all my savings went on the deposit and then I paid around £2500 in fees for searches, pointless packs, moving company etc as I went along.
Not the easiest but we don’t live in a world where a 28 year old can save £30k for a deposit and then save another 3k for fees before that extra 3k gets swallowed up in the prices of houses going up
LeoSayer said:
Don't assume that being detached means you won't have neighbour problems.
Likewise, don't assume that being attached means you will.
This.Likewise, don't assume that being attached means you will.
Unless they are really neighbours from hell I would stay put and ignore them.
Not nice eating beans on toast because your mortgage is crippling you.
When I was younger every last penny went into the first couple of property purchases, but I had a decent salary and reasonable disposable income after mortgage payments.
I think stretching yourself when you're younger can certainly put you in a better position later in life. Simply running a shed rather than a PCP deal can re-balance the numbers quite quickly if you stretch the mortgage.
In your shoes I'm not sure I would now, especially with the many variables in the economy.
You mentioned your mortgage deal ends next summer, I'd look into locking in a new deal asap and dragging out as much equity as you can. It looks like rates are only heading one direction and the new deal should be portable. I'm sure Sarnie will offer much better guidance on this if you drop him a line.
I think stretching yourself when you're younger can certainly put you in a better position later in life. Simply running a shed rather than a PCP deal can re-balance the numbers quite quickly if you stretch the mortgage.
In your shoes I'm not sure I would now, especially with the many variables in the economy.
You mentioned your mortgage deal ends next summer, I'd look into locking in a new deal asap and dragging out as much equity as you can. It looks like rates are only heading one direction and the new deal should be portable. I'm sure Sarnie will offer much better guidance on this if you drop him a line.
You're in a nice position in that you're not needing to max your borrowing to buy the place, that gives you options such as borrowing more and keeping some cash back with the only real thing to consider being LTV thresholds as and when you come to buy, best advice given the unknowns are just save as much as you can between now and then and see where you're at.
Have you spoken to your provider about porting a mortgage so you don't have to wait a year and can move now?
Have you spoken to your provider about porting a mortgage so you don't have to wait a year and can move now?
Wacky Racer said:
LeoSayer said:
Don't assume that being detached means you won't have neighbour problems.
Likewise, don't assume that being attached means you will.
This.Likewise, don't assume that being attached means you will.
Unless they are really neighbours from hell I would stay put and ignore them.
Not nice eating beans on toast because your mortgage is crippling you.
Not neighbours from hell but I won’t move to another semi. So it’s that or nothing. And at 35 I don’t think I should be staying put and sucking it up just because, life’s too short to be miserable.
Detached I know doesn’t offer protection from dips
t neighbours but at least it eliminates most risk of noise when inside your closed up house which is what we desperately seek. okgo said:
You're in a nice position in that you're not needing to max your borrowing to buy the place, that gives you options such as borrowing more and keeping some cash back with the only real thing to consider being LTV thresholds as and when you come to buy, best advice given the unknowns are just save as much as you can between now and then and see where you're at.
Have you spoken to your provider about porting a mortgage so you don't have to wait a year and can move now?
We could do it now as ERC is pretty paltry. But we have some short term stuff going on that makes waiting til next summer a bit more sensible and gives the market a bit of time to hopefully stop accelerating so rapidly with the cost of living squeeze. There’s no perfect time but next summer makes sense as we’d be able to have a small savings pile at least to pay upfront costs and a few niceties as well as being ERC free. Have you spoken to your provider about porting a mortgage so you don't have to wait a year and can move now?
Edited by F3RNY7 on Monday 7th February 15:06
That is quite the gamble though, tbh. Depends how much ERC is, but if its small, I'd get on with it now (depending how important those things you mention are) because you never know what prices will do over the year, 5% not out of the question, depends what niceties and how paltry the ERc is. Fee's you'd need now/upfront are not much, on your salary you'd be able to pull together all of that in a couple of months. And if this savings thing worries you just borrow another 10 grand and keep 10 back. Easy.
okgo said:
That is quite the gamble though, tbh. Depends how much ERC is, but if its small, I'd get on with it now (depending how important those things you mention are) because you never know what prices will do over the year. Fee's you'd need now/upfront are not much, on your salary you'd be able to pull together all of that in a couple of months. And if this savings thing worries you just borrow another 10 grand and keep 10 back. Easy.
Can you do that? I assumed you would have to evidence that you’re only borrowing what you need to meet the purchase price unless you’re repaying unsecured debt etc. F3RNY7 said:
Can you do that? I assumed you would have to evidence that you’re only borrowing what you need to meet the purchase price unless you’re repaying unsecured debt etc.
I did just that two years ago, held back 30k or so to do some decorating and furnish it. Perhaps I had to give a reason, but it was pretty straight forward from memory. Obviously 30k over 25 years at 1% is about a quid a month so meh.I'm in a similar position to you in terms of buying and selling figures - we are trying to move at present (and having a bit of a 'mare finding somewhere, but that's another story)
Whether we are at the top of the market now or there's more to come or a crash is imminent....who knows.
All I know is I'm buying the house to live in for the next 20-30 years. On that basis, I can't see myself losing money.
Obviously you need a slush fund - bigger house means bigger things to fix
Whether we are at the top of the market now or there's more to come or a crash is imminent....who knows.
All I know is I'm buying the house to live in for the next 20-30 years. On that basis, I can't see myself losing money.
Obviously you need a slush fund - bigger house means bigger things to fix
We did something similar-ish around the same age. In fact the numbers and reasons were pretty similar too (though we had a baby when we did it).
Lived in a terraced house in a v nice part of Manchester. (Housing association) neighbours from hell on one side - well they started off OK but went off the rails. So we decided, when our daughter was born, to up sticks and mover closer to my in-laws.
Sold for 310k (only 30k more than we paid for it 6 years before) and bought for 380k (so not as much as you're looking at). Not perhaps the house I would have chosen - unexciting looking detached 60s bungalow - but there wasn't massive choice in our price range back in 2011 because of the after effects of the GFC. We put our cash in as well to make the move - borrowing was much more restricted in 2011, so the banks were much stricter on lending criteria.
Our joint income was similar to yours at the time, so the increased borrowing at 3.5% (higher interest rates back then!) did impact the take home. As did the increased costs of commuting, childcare and having to buy a second car. So there were some "hidden" costs we hadn't factored in. 10 years on our gross income has doubled (not net sadly - dreaded taxes), though the mortgage has also increased after we've done lots of building work to the place (and are about to do some more).
We struck lucky with our neighbours (retired both sides) and we're still happy here 11 years on. Go into with your eyes open on any additional costs and plan for how you replenish your savings - as others have said, a couple of years of saving up once you have moved and cutting your cloth accordingly should put you into a safer financial space again. But most of all choose the right house in the right area..!
Lived in a terraced house in a v nice part of Manchester. (Housing association) neighbours from hell on one side - well they started off OK but went off the rails. So we decided, when our daughter was born, to up sticks and mover closer to my in-laws.
Sold for 310k (only 30k more than we paid for it 6 years before) and bought for 380k (so not as much as you're looking at). Not perhaps the house I would have chosen - unexciting looking detached 60s bungalow - but there wasn't massive choice in our price range back in 2011 because of the after effects of the GFC. We put our cash in as well to make the move - borrowing was much more restricted in 2011, so the banks were much stricter on lending criteria.
Our joint income was similar to yours at the time, so the increased borrowing at 3.5% (higher interest rates back then!) did impact the take home. As did the increased costs of commuting, childcare and having to buy a second car. So there were some "hidden" costs we hadn't factored in. 10 years on our gross income has doubled (not net sadly - dreaded taxes), though the mortgage has also increased after we've done lots of building work to the place (and are about to do some more).
We struck lucky with our neighbours (retired both sides) and we're still happy here 11 years on. Go into with your eyes open on any additional costs and plan for how you replenish your savings - as others have said, a couple of years of saving up once you have moved and cutting your cloth accordingly should put you into a safer financial space again. But most of all choose the right house in the right area..!
If it was me I would push myself to get a big mortgage as you will end up with more assets when retiring. I did not do that, but If I had I would be £300k better off now. Also think carefully about repayments in a few years time If interest rates hit 5%, Everyone says they wont but what if they do? They have been way higher than that not too many years ago. If you are not scared of things like having to sell if it comes to it, then go for it. Life can change a lot in a very short time. What happens when you are in your mid 50's and don't want to work as hard any more, not so easy to work less if you still have a massive mortgage to pay off. Most people in their 50's want to work a bit less but just can't.
Muzzer79 said:
I'm in a similar position to you in terms of buying and selling figures - we are trying to move at present (and having a bit of a 'mare finding somewhere, but that's another story)
Whether we are at the top of the market now or there's more to come or a crash is imminent....who knows.
All I know is I'm buying the house to live in for the next 20-30 years. On that basis, I can't see myself losing money.
Obviously you need a slush fund - bigger house means bigger things to fix
Same here, this would be our house til retirement. So I feel like by trying to wait for the perfect time it’ll just never happen. Whether we are at the top of the market now or there's more to come or a crash is imminent....who knows.
All I know is I'm buying the house to live in for the next 20-30 years. On that basis, I can't see myself losing money.
Obviously you need a slush fund - bigger house means bigger things to fix
Slush fund is why I’d quite like to do it next summer rather than right now. No ERC, chance to save maybe £10-15k between now and then which I can either put down or withhold if I think some stuff might need doing.
It would likely take us months for us to find something at any rate based on what I’ve seen on the market lately.
F3RNY7 said:
Wacky Racer said:
LeoSayer said:
Don't assume that being detached means you won't have neighbour problems.
Likewise, don't assume that being attached means you will.
This.Likewise, don't assume that being attached means you will.
Unless they are really neighbours from hell I would stay put and ignore them.
Not nice eating beans on toast because your mortgage is crippling you.
Not neighbours from hell but I won’t move to another semi. So it’s that or nothing. And at 35 I don’t think I should be staying put and sucking it up just because, life’s too short to be miserable.
Detached I know doesn’t offer protection from dips
t neighbours but at least it eliminates most risk of noise when inside your closed up house which is what we desperately seek. Gassing Station | Finance | Top of Page | What's New | My Stuff