Extend or move?

Parazard2

Registered User
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80
Age: 39
Spouse’s/Partner's age: 47

Annual gross income from employment or profession: 82K
Annual gross income of spouse: Covid payment, been out of work 1.5 yrs - hoping will be back to work within a year max to ca 36-40k

Monthly take-home pay: 4300- 4800 (take regular parental leave days)

Type of employment: e.g. Civil Servant, self-employed: private

In general are you:
(a) spending more than you earn, or
(b) saving?
Saving a tiny bit, but mostly cutting even most months

Rough estimate of value of home: Approx 370k / paid 300k
Amount outstanding on your mortgage: 220k fixed rate @ 2.2 % - €909 per month),


Other borrowings – car loans/personal loans etc: None

Do you pay off your full credit card balance each month? Yes

Savings and investments:
60k savings - 50k ring-fenced for potential extension, rest likely to disappear quickly re: upcoming unpaid maternity leave

Do you have a pension scheme?
No

Do you own any investment or other property?
Partner owns a duplex property currently rented but looking to try and sell in next month or so (pre covid notice was given). May make 20k profit after expenses.

Ages of children: 2 + a 2nd one on the way end 2020

Life insurance: yes

What specific question do you have or what issues are of concern to you?

I have been planning to extend my well located terraced house as it is quickly becoming very tight for all of us. I am not sure whether it's worthwhile investing much in it, or whether I should consider holding on to as much as I can and plan to buy a bigger property together in 4-5 years time once my partner is back at work and children out of childcare? I am a bit scared by a big mortgage as I would like to keep some freedom down the line and not have to work a high responsibility job forever. I am also pretty sure my income will drop as I doubt I will still have this job in a few years' time.

In my mind I would invest max 50-60k in the current property, but I am now wondering whether it would be ok to do a double extension and spend up to max likely value of house (I am guessing it would never be more than 390-400k) so that we can improve our quality of life in it as we might never be in a position to (or want to) afford a bigger property. Or is the market going to crash and we could be in a position to get something much bigger (but maybe that could happen in 1-2 years, not in 4-5 years so we might miss the boat on that crash)?

Should we invest in what we have, and play big only if we win the lotto?
 
Can't answer all your questions but I would be cautious about extending. Generally speaking you rarely get all your money back, and you run the risk of overcapitalising.

If you thought this was the last home you might ever own, then it might be worth it; but other than that, you'll almost always be better off moving if you can. Your children are very young yet, so you've a bit of time before schools start to become a factor.

If you really think future employment might be an issue, I'd move/borrow now while you still can. If the worst comes to the worst, you can always rent out a room / keep students for extra income.
 
How many bedrooms in your current house ? Not having a go at you but I often hear people with 2 children saying they need more room despite the fact that they have 3 or 4 bedrooms. Would moving into the duplex be a short term option if you had to sell your current property ? That way you would not be in a chain if trying to sell and buy at the same time.
 
How many bedrooms in your current house ? Not having a go at you but I often hear people with 2 children saying they need more room despite the fact that they have 3 or 4 bedrooms. Would moving into the duplex be a short term option if you had to sell your current property ? That way you would not be in a chain if trying to sell and buy at the same time.

Logistically the duplex would be too far from work and childcare to be a viable option.
I know what you are saying re: space - we have 3 bedrooms (2 very small) and a tiny bathroom plus a galley kitchen. There is a very nicely sized double sitting room. The overall size of the house is just over 80m2 with a tiny yard. We also have 2 dogs so there are a lot of bodies around the place! There is no second living space and we can only retreat to a bedroom for privacy. The issue of space is more about living space than bedrooms.
 
Of course she is involved in this, not sure what makes it sound like she isn't (genuinely curious)?

er how likely is it that your 47 year old partner thats having a kid is going to be back in work in a years time?

also how do you foresee childcare costs going, if you are both working you will still need child care of some form?

house does sound small for 4 and 2 dogs though.
 
er how likely is it that your 47 year old partner thats having a kid is going to be back in work in a years time?

also how do you foresee childcare costs going, if you are both working you will still need child care of some form?

house does sound small for 4 and 2 dogs though.
Exactly. So is it even going to be possible to move to anything better at all? Or shall we just focus efforts on making what we have better instead?
 
The house is tiny. You’ve enough for a deposit I’d move as it would be tough as the children grow. But I think that you need to do a good plan in terms of income and the future.
 
Equity 150k
Savings 60k
Sell investment property 20k
Total available 250k

How much will new house cost? 550k?

Mortgage required: 300k
 
I think the best bet is to move if you know what your income is going to stabilise to in the next few years.

You are currently the main earner but by then end of the year you are going from 82K (Probably less with parental leave) to 0K for the duration of your maternity leave. You expect your role to disappear in the next 3 years and your earning power to half? Will you continue to work part time after the birth?

your partner will have been unemployed for 2.5 year by the time you estimate she will return to work. How confident are you both that she will secure a steady income? I am assuming you have 0 childcare costs at present with you partner not working so how much will that put a dent in your take home pay?

So if you can afford a €300K mortgage, pay for childcare, groceries, cars, dogs, etc in a few years then I would move. Have you tried any mortgage applications to see if bank will lend to you and how much? One other question springs to mind, do you plan to have more children and if so how will that impact your earning power and your expenses?

Apologies there are more questions than answers but the more evaluation you do yourself the better able you will be to establish affordability.
 
Ach now I see you are in dispute with your neighbours over an extension and plan to sue the planning department. So do you want to move because of this? You would wipe out your savings going down the legal route with no guarantee of success. So your neighbours would be more hostile and you would not be able to afford to move.

I am no longer sure that moving is the best option for you.
 
Ach now I see you are in dispute with your neighbours over an extension and plan to sue the planning department. So do you want to move because of this? You would wipe out your savings going down the legal route with no guarantee of success. So your neighbours would be more hostile and you would not be able to afford to move.

I am no longer sure that moving is the best option for you.
Yeah no I am not going to sue the planning department but yes indeed the new neighbors are not good news and am not looking forward living next door to them. We do have childcare costs as we are caught in the vicious cycle of needing childcare for my partner to be able work... The plan was not to be out of work ever never mind this long. So childcare expenses will be an issue for another 2 years at least. No intention of having more kids after this one!

I like the house we are in and the location is amazing. But yes it is small and children will get bigger...
 
What about converting attic?

We can build an extension for now. If we go double we can add about 25m2, bringing the total to about 110m2. Converting attic would be an option also down the line but it doesn't have much height so wouldn't be technically habitable. We were due to build an extension but builder disappeared on us. Prices are also quite high so we would be looking at 80-100k for a 2 storey and 20-30k for an attic conversion? It would add another 15m2? Is it worth investing 100-120k into a 300k property (with not nice next door neighbors)?
 
I'd agree with others who've said it's never going to be worth it if by worth it you mean you'd recoup the expenditure in a future sale. You won't. Bad neighbours would be a deal breaker for me. Life's too short. Have you considered any properties in the 420k range (value of your home plus your savings)? If you found the extra space you're looking for here you may be able to purchase while simultaneously reducing the LTV on your home. Is working from home an option for you? If so, being near the office may not be as big a deal as it used to be. The flexibility of wfh is likely to become a permanent feature in many service sector jobs. How energy efficient is your current home versus what you could afford to buy without increasing debt? I'd consider this also when deciding between alternatives. Is the market likely to crash? If it does this could also crash the value of your property and impact your employment status and ability to get future finance. People who try time the market are wasting their time imo
 
I'd agree with others who've said it's never going to be worth it if by worth it you mean you'd recoup the expenditure in a future sale. You won't. Bad neighbours would be a deal breaker for me. Life's too short. Have you considered any properties in the 420k range (value of your home plus your savings)? If you found the extra space you're looking for here you may be able to purchase while simultaneously reducing the LTV on your home. Is working from home an option for you? If so, being near the office may not be as big a deal as it used to be. The flexibility of wfh is likely to become a permanent feature in many service sector jobs. How energy efficient is your current home versus what you could afford to buy without increasing debt? I'd consider this also when deciding between alternatives. Is the market likely to crash? If it does this could also crash the value of your property and impact your employment status and ability to get future finance. People who try time the market are wasting their time imo

I agree with much of above. There is very little in that price range. A crash wouldn't reduce the value of this property too much because of location, but may bring bigger properties within our reach alright. My LTV is already below 60% and I can absolutely WFH (was already). My house is small, never cold or humid...only problem with it is space and the neighbours (and poor sound insulation). I think to do better we would need to look at the 500-600k price bracket... (unless with a crash that becomes a 400k bracket). I would not be loaned enough to buy my own home with x2 childcare fees I don't think...

Hence my dilemma: will I just make the house bigger and save myself the hassle as well as cost of looking, moving and very importantly doubling my very manageable monthly repayments?
 
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