Would you spend every penny you have to buy a house?

sapper

Just wondering in general if people would normally look to spend every last penny buying the best house possible or if they would prefer to get a house that ticks most boxes but leaves them with money left over for holidays, rainy days etc

Last time I bought a house was in the Celtic tiger and back then you were "mad" not to put every penny (and a few grand borrowed from your parents and the credit union) into property.

Currently looking at 2 houses one that is pretty good and leaves me with 6 months salary and another which is a dream house but would leave us in hock to parents etc for a year or two - feeling uncomfortable about the latter option....

dudara

I'd personally always want a nice cushion in the bank.

stefanovich

sapper wrote: »

Just wondering in general if people would normally look to spend every last penny buying the best house possible or if they would prefer to get a house that ticks most boxes but leaves them with money left over for holidays, rainy days etc

Last time I bought a house was in the Celtic tiger and back then you were "mad" not to put every penny (and a few grand borrowed from your parents and the credit union) into property.

Currently looking at 2 houses one that is pretty good and leaves me with 6 months salary and another which is a dream house but would leave us in hock to parents etc for a year or two - feeling uncomfortable about the latter option....

I'd trust your instincts and go with what you can actually afford comfortably. You can always upgrade in the future.

Wesser

I am in a similar situation.

I am looking at one house I love but in a slightly ' bad ' area. Would have plenty cash over if I went for it.

Second is a ' good ' area but costs 20k more and needs 25 to 30 k put in to it. Makes me nervous.

The trusted people in my.life advise me to.go for option b . Very hard to know.

HeidiHeidi

sapper wrote: »

Just wondering in general if people would normally look to spend every last penny buying the best house possible or if they would prefer to get a house that ticks most boxes but leaves them with money left over for holidays, rainy days etc

Last time I bought a house was in the Celtic tiger and back then you were "mad" not to put every penny (and a few grand borrowed from your parents and the credit union) into property.

Currently looking at 2 houses one that is pretty good and leaves me with 6 months salary and another which is a dream house but would leave us in hock to parents etc for a year or two - feeling uncomfortable about the latter option....

If you've a cast-iron guarantee that your earnings won't decrease , and good insurance in case you have an accident and are out of work for a while/permanently, and can be fully sure that you won't split up in the near/medium future, and probably a few other contingencies that I haven't thought of - then go for it.

Otherwise, look at the amount of people still struggling with negative equity, unmanageable repayments and facing threats of repossession, and think again.

That'd be my take on it anyhow.

Paulw

You also have to consider that current low interest rates won't last. There is even talk recently of rates increasing soon.

So, you need to factor in your repayments, not just the purchase price.

Bulmers

We bought house below what could afford so could have the nice hols and no money worries. It was our first house and stepping stone to a bigger one but still here.we did start looking around this year but there's another boom happening and it looks like Ecb are going to start increasing rates next year so, might stay another while :-)

It's one less worry you can plan out of your life is the way I see it,life can throw enough at you.

Not being able to pay mortgage and lose house is one worry I would not to like to have to deal with.

evolving_doors

Wesser wrote: »

I am in a similar situation.

I am looking at one house I love but in a slightly ' bad ' area. Would have plenty cash over if I went for it.

Second is a ' good ' area but costs 20k more and needs 25 to 30 k put in to it. Makes me nervous.

The trusted people in my.life advise me to.go for option b . Very hard to know.

Better buy the worst house on the best street than the best on the worst Street.
For the op... if you want the dream house now then just go for it ... but stop looking at property prices after and feeling remorse for 'paying too much'.
We bought a doer upper and pumped a ton into it after.... should have just thrown it into a 'better house'. Although our mortgage is relatively small were now looking to move again .... and start with new mortgage, groan.

sapper

Gebgbegb wrote: »

We bought a doer upper and pumped a ton into it after.... should have just thrown it into a 'better house'. Although our mortgage is relatively small were now looking to move again .... and start with new mortgage, groan.

Yes that's my worry on buying the 'lesser' house - we'd end up spending lots of cash doing it up whereas with the dream house we'd be penniless for the first year or two but we'd never want to move (I hope) and would only need painting etc

Wesser

How much money does the cheaper house need put in to it?
Add it up .
It might the same total cost as the more expensive house.
If so , just go for the more expensive house.

trobbin

sapper wrote: »

Just wondering in general if people would normally look to spend every last penny buying the best house possible or if they would prefer to get a house that ticks most boxes but leaves them with money left over for holidays, rainy days etc

Last time I bought a house was in the Celtic tiger and back then you were "mad" not to put every penny (and a few grand borrowed from your parents and the credit union) into property.

Currently looking at 2 houses one that is pretty good and leaves me with 6 months salary and another which is a dream house but would leave us in hock to parents etc for a year or two - feeling uncomfortable about the latter option....

Are you talking about buying one house cash, and having money left over. While other option is nearly buy house cash apart from small loan that will take a couple of years to pay off?
Or are you taking out a mortgage in each situation?

Sleeper12

I'd be happy not to go on holidays for a couple of years for a better house but I'd still want something in the bank. I'd want to know that if the asre fell out of the car I'd have enough to replace it.

K.Flyer

I remember when I bought my first house in the 80s and going through the same questions in my head, the best advice I received was that if I couldn't afford the mortgage out of 2 weeks wages I couldn't really afford the house.
Interest rates were low enough at the time, but soon skyrocketed into double digits, that advice, which i followed, helped me hold onto the house.
Spending every penny you have on your house purchase is foolhardy. Interest rates are going to go up, you will have maintenance and upkeep costs on the house and what if you suddenly need a new appliance or another unexpected cost.

Addle

Yes.
I adore my home. It's my dream home and is perfect for me.
I've sacrificed a lot to have it and spend a lot of my spare time in it; but nothing makes me happier.

dori_dormer

The other thing to think about the house in the less desirable area is if it's worth putting the money into it. Houses on certain areas have ceilings on the max you can get if you need to sell. No point putting dead money into a house. Ideally you don't want to move or sell but is something to think about. My sister is in a small terrace and they could really do with an extension out the back but it's a waste of money as they'll never get the return so looking at moving instead

riclad

Buy a house you can afford , but think will this house increase in value
in 5-10 years .It s worth spending every penny if you think i can be happy to live here for 20 years whether prices go up or stay as they are now.
People who may wish to have children have to think,
will i be happy to bring up children in this area .
Also at least when you buy you have a large mortgage h but you are no
longer at the mercy of a landlord who may decide to sell up in a few years .

AlmightyCushion

dudara wrote: »

I'd personally always want a nice cushion in the bank.

You can have this cushion wherever you want.

Definitely wouldn't put everything into buying a house. You need to have some sort of safety net in case shít hits the fan.

Samuel T. Cogley

Gebgbegb wrote: »

Better buy the worst house on the best street than the best on the worst Street.

I tend to disagree.

Once an area ticks the boxes for a given buyer there are massive advantages to not playing this silly postal area game. Prime example, 100Sqm house in Kilbarrack 250K. Same house in Foxfield 450K. Distance between the two houses less 300m.

Edit: Sorry didn't really address the OP. So if it's forever home vs. an intermediate step and depending on whether you're really committing everything - for example can you fall back on parents in an emergency - and can you live on boxes and build up savings again quickly. Forever home.

mickmac76

You should always have some spare cash left over so I'd say go with the cheaper house. Rising interest rates, economic uncertainty and shocks like serious illness or death can and probably will occur over the term of the average mortgage.

okiss

My advice is to go for house b in a better area. You have told us house b will cost €20k more and it needs €20k to €25k work done on it.

I would get a good survey done on this house so your aware of what needs to be done and use this to your advantage. You can then go to the seller and say I am offering x as a, b and c need to be replaced. You can do this work over a period of time.

You could always let out a bedroom under the rent a room scheme. You can earn up to €14,000 a year tax free under this. This would give you some extra money to do up the house.

Also in time you may have a family so a house in a better area could give you better options in regards to what schools you child can attend. A house in a slightly bad area may only have one poor local national and secondary school.

If your parents are willing to give you some funds to buy the better house I would accept the offer. Ok you don't like owing your parents money and you may not have much spare funds over the next 2 or 3 years. Long term it could offer you a nice house, in a better area, with good schools so you can stay there long term. If circumstances change or you need to move away you would have a better chance of selling the better house also.

Buying the house is the 'slightly bad area' could mean that after living there for a few years you decide to move out due to anti social behaviour, bad neighbours, poor local primary and secondary schools so your trying to sell this house to buy a better house in a nicer area. You may have a child or two in the mix then so you can't borrow as much. Yes saved money now but long term the cost of moving to a better house in 5 years time could be a lot more.

.

April 73

If the more expensive house has the genuine potential to be a forever home you should push the finances to do it. Especially if you are young and you have the potential to increase earnings in the future.
If there is even a question mark in your head about the area that the other house is in - you will most likely end up moving in the future anyway. Moving house is expensive.

Grawns

I would stretch a little for the forever house. Eat beans for a year or two. You're not talking about huge financial pressures, and you're going to use savings and relatives will help out. This is a big difference from taking on an unsustainable mortgage.

evolving_doors

I suppose I would advise on option B purely because of my own experiences (with option A type answer). But then again there's probably a whole lot more questions.

Will the pay in the job likely to rise?
Partner's income (sorry can't remember if you said you had a partner)
Have Kids? Kids in future?
Inheritance down the line (sorry but it might be a possibility!).
Aspects of your life that you can cut back on (foreign holidays, expensive social life, resturants).
Could the location of the house cut down on travel expenses?
Interest rates are likely to rise.

asteroids over berlin

serious illness or death - really?? Covered by your insurance etc

From somebody who started out buying a house in a crap area with unbelievable low life neighbours, i say buy the best you can afford. Nice to have a cushion but if your safe in your job - start saving again for a rainy day after the sale

My intention isn't to drag this off topic, but am I right in saying that i'd be in the minority - My mindset being that you should buy a total of 1 houses in your life.

I don't think I fully understand this craic of buying a temporary home, or buying with the intent of selling etc. (especially seeing how that went in the last decade!?).

I'm hoping to buy a house this year, but it'll be the first and last house I buy.

I also don't understand people saying they wouldn't spend money on a house that they wouldn't get back when selling? Someone on the previous page said their friend or sister or such had a house, wanted an extension and won't get it because they won't recoup the money? I am bewildered at that? Surely getting an extension on to the house is the money being put to good use anyway? (ie; it's not money that has been bet on a horse, you are actually getting a better quality of home life from it for the time you live there)?


Maybe im the mad one, but if i had a house worth 10k, and an extension would cost 5k, but I knew i wouldnt ever get more than 11l for the house, if i wanted the extension, i'd still get it.. but i'd never be bothered on losing out on the 'dead money' as i'd be in the house til i'm dead, myself.

I keep hearing about 'starter' homes and that kinda thing. Is this really the common way that people are these days (buying and moving houses like they're trading in cars?) or is it just a boards member thing and doesn't really reflect the reality of day-to-day ireland?

At the end of the day OP, you can change anything in a house, decoration, extend etc
You can never change the location.
Go with the house in whatever place you would want to live in.

Wesser

Deleted User wrote: »

My intention isn't to drag this off topic, but am I right in saying that i'd be in the minority - My mindset being that you should buy a total of 1 houses in your life.

I don't think I fully understand this craic of buying a temporary home, or buying with the intent of selling etc. (especially seeing how that went in the last decade!?).

I'm hoping to buy a house this year, but it'll be the first and last house I buy.

I also don't understand people saying they wouldn't spend money on a house that they wouldn't get back when selling? Someone on the previous page said their friend or sister or such had a house, wanted an extension and won't get it because they won't recoup the money? I am bewildered at that? Surely getting an extension on to the house is the money being put to good use anyway? (ie; it's not money that has been bet on a horse, you are actually getting a better quality of home life from it for the time you live there)?


Maybe im the mad one, but if i had a house worth 10k, and an extension would cost 5k, but I knew i wouldnt ever get more than 11l for the house, if i wanted the extension, i'd still get it.. but i'd never be bothered on losing out on the 'dead money' as i'd be in the house til i'm dead, myself.

I keep hearing about 'starter' homes and that kinda thing. Is this really the common way that people are these days (buying and moving houses like they're trading in cars?) or is it just a boards member thing and doesn't really reflect the reality of day-to-day ireland?

I think it's because people can't afford the house that they really want but they may be able to afford it in the future.

evolving_doors

[Deleted User] wrote: »

My intention isn't to drag this off topic, but am I right in saying that i'd be in the minority - My mindset being that you should buy a total of 1 houses in your life.

I don't think I fully understand this craic of buying a temporary home, or buying with the intent of selling etc. (especially seeing how that went in the last decade!?).

I'm hoping to buy a house this year, but it'll be the first and last house I buy.

I also don't understand people saying they wouldn't spend money on a house that they wouldn't get back when selling? Someone on the previous page said their friend or sister or such had a house, wanted an extension and won't get it because they won't recoup the money? I am bewildered at that? Surely getting an extension on to the house is the money being put to good use anyway? (ie; it's not money that has been bet on a horse, you are actually getting a better quality of home life from it for the time you live there)?


Maybe im the mad one, but if i had a house worth 10k, and an extension would cost 5k, but I knew i wouldnt ever get more than 11l for the house, if i wanted the extension, i'd still get it.. but i'd never be bothered on losing out on the 'dead money' as i'd be in the house til i'm dead, myself.

I keep hearing about 'starter' homes and that kinda thing. Is this really the common way that people are these days (buying and moving houses like they're trading in cars?) or is it just a boards member thing and doesn't really reflect the reality of day-to-day ireland?

Depends on your location too... I'm originally from the shticks and most of my secondary school buddies got a massive house and a plot under em in their early twenties. House for life. If you're making yeer own way in Dublin/Cork city etc then it's the ladder yer on

Danbo!

I struggled with this before we bought too. Prices were starting to rise and I head a figure in my head I didn't want to go above, and slowly but surely houses were inching outside that figure.

Anyway, bank approved us for what was in my opinion, a silly amount. It basically meant every penny I was paid would go to the mortgage and we'd live off my wife's salary. I asked about what if she goes part time or gives up work when we have kids, was told ah don't worry about that, etc.

In the end, played it safe. Went with a lovely house in the area we grew up. Very manageable repayments, we'd still have the cushion in the bank and still manage to save a little. We bought a new car and went on holidays after buying as we weren't completely strangling ourselves financially.

Fast forward 3 years. We've had the kid. At 4 months old she went into hospital and spent 8 months there. My wife was still on maternity leave, but due to go back to work during that time, and couldn't. She's now on carers leave for minimum two years to take care of our daughter, so we're just on my salary.

In the end, I'm 90% delighted with our decision. I say 90% as we played it a bit too safe, probably could have upped the budget a little and still been comfortable. But had we taken banks advice we'd have been in trouble now. Yeah we could have sold the house if we were in big trouble as the markets has increased, but we couldn't have banked on that too.

We're both healthy and in strong industries, and while I don't want to spend my life worrying about every unforseeble event, **** happens.

4ensic15

One of the things you can't do with a house is physically move it. It is all about location. The only thing to watch is that the monthly repayments are not too heavy. Other than that every penny should follow the location, location location rule.

pwurple

So many factors, but I'd say if your dream house is within reach with a small stretch, then do it.

Moving house later again is costly. And it's money for nothing tangible. Solicitors, auctioneers if you have to sell the other one, moving costs etc.