Mortgage free or bigger house

k mac

@Oscar_Madison thanks really good advice there especially about making the EA aware i am bidding against myself

Oscar_Madison

https://www.boards.ie/discussion/comment/120898349#Comment_120898349

Best of luck and yeah, my words were “this goes against everything I believe in when it comes to bidding “😂- the reality was, it was the perfect home- location, condition (needed some work hence low price but we had factored that in and wanted to make some changes anyway) etc so we didn’t want it to go to someone else and we knew the property market was starting to rise rapidly so wanted to clinch this deal before others woke up .

If the seller has common sense, they’ll take your raised offer- I’d offer no more than 3k first on the basis of sale agreed, no more bids taken and contracts underway - the seller, if interested will likely come back with 8-10k- raise to 5k and really grumble to the estate agent how badly you feel about all of this - chances are they’ll squeeze one more grand so 6k - it’s likely what you’ll pay anyway at least if a new bidder joins- one question I do have though considering lack of bids vs demand right now, do you have a theory as to why there aren’t more bidders? Is it location, condition of house etc or do you just think coz it’s holiday season less bidders in the market?

Former Former Former

https://www.boards.ie/discussion/comment/120897477#Comment_120897477

If the vendor comes back and rejects your bid, only then should you consider upping it. Give the EA a call and ask for an update, say you might have to look elsewhere, but don't do anything more than that.

If you're not going to be in a chain, you have a very strong position as a buyer.

tom1ie

https://www.boards.ie/discussion/comment/120896832#Comment_120896832

What don’t you rent out a room?

14K tax free a year and you won’t be a landlord either if you live in the house.

Nice little earner.

k mac

"one question I do have though considering lack of bids vs demand right now, do you have a theory as to why there aren’t more bidders? Is it location, condition of house etc or do you just think coz it’s holiday season less bidders in the market?"

Not sure but think maybe because its at the high end of prices there may not be alot of people able to buy at that price, also maybe it is priced too high.

Oscar_Madison

https://www.boards.ie/discussion/comment/120898914#Comment_120898914

Then certainly proceed with caution if price is already on the high-end of what it’s worth- you’re in a strong negotiating position assuming the seller is willing to sell below asking price/ if the seller is a total dreamer then they’ll be waiting for the market to catch up with their sell price - you’re reliant here on the seller anxious to sell - no amount of offers under asking will work if seller is adamant they won’t sell below asking figure

Maewyn Succat

https://www.boards.ie/discussion/comment/120896832#Comment_120896832

I understand what you are saying and the ideal position for anyone is to be mortgage free but if you were to go back to 2006 would you build the house you have now or buy a semi-detached house in an estate with no garden, which is what I currently have?

Madd002

Definitely not, I get why you want to move though, it's taking out the mortgage again that would have me fearful, but if you can afford it great!! I was 23 at the time & hadn't a clue was paying 400 rent per month so jumped at the chance for 100% mortgage but we were sensible with what we borrowed and I come from a family of trades, so built a 4 bed bungalow with sunroom that we seen somewhere else and we done upstairs at same time so we've 6 beds 4 baths, maybe cause the kids grew up so fast that I feel like I'd like something smaller.

I'm just happy to be able to clear mortgage, I dont earn much more than minimum wage so we have been so frugal, managed through the recession, I'll be just glad to see my wages now and to buy something I want instead of need. I'd be afraid to start again. On the upside if we were to sell or build again we'd still be mortgage free.😊

Madd002

https://www.boards.ie/discussion/comment/120898856#Comment_120898856

Have thought about it, but I'm liking the peace and quiet, not sure how I'd feel with stranger in house.

tom1ie

https://www.boards.ie/discussion/comment/120900681#Comment_120900681

Yeah it’s definitely something to factor in to the decision alright.

Bass Reeves

https://www.boards.ie/discussion/comment/120897477#Comment_120897477

I would not disagree with @Oscar_Madison in playing it that way. You could also tell the auctioneer you are going to move on as your mortgage circumstances are in danger of your limit being changed. Play the game that there might be a bit of flexibility to move slightly present

It amazing the way the danger of losing a bidder can change a vendor thinking.

Citygirl1

https://www.boards.ie/discussion/comment/120897477#Comment_120897477

Hi @k mac : Regarding your first paragraph, a piece of advice: Before purchasing a new property, first thing you should do, is engage a good solicitor, and get them to review in full the title deeds of your existing property, and ascertain upfront if there are any issues, including land registry, boundaries, planning etc. Do not assume that all is in order, even if it seemed ok when you purchased. If the solicitor is not willing to do this, move on to another one.

Equally, look to see if there are other issues with the property which could hold things up considerably. Don't assume that you can sell fairly quickly.

You don't want to be left with a very large mortgage, and two properties.

A few years ago, I was in much the same position. I wanted to move from the place I was in. Was in the fortunate position position of having the mortgage fully paid, with some savings, so was able to draw down a large mortgage sufficient to be "bridging", for what I thought would be a few months. I closed the sale on my new home, with my old place already sale agreed. Happy days. Then the nightmare started, as over the next year, the property was sale agreed, and fell through, three times, main due to unexplained issues with the title. After a full year, I sacked my solicitor, and engaged a new one, who very quickly found a fundamental error made when I purchased in 2007. The original solicitor was either so incompetent or so lazy, to be unable to see this.

Four years later, I have the place sold. But, in the meantime, had so much expense, stress and uncertainty, it really ruined my enjoyment of my lovely new home.

what_traffic

Could have written what the OP wrote two years ago (other than went 20yr mortgage rather than 15yr to bring payments down a bit further than OP).

Moved last Winter into a much bigger house.

Every month - the kids are get bigger & when the mortgage payment goes out I say to myself it has been worth every penny. Only regret not doing it a couple of years earlier.

k mac

@Citygirl1 good points i hope i will have no such issues as it was a house i built so should be no issues with deeds. Before it goes on the market i will be getting a report from an engineer to say there are no planning issues (can't remember what this is called), was advised to get this by an EA just in case any issues arose at a later stage that might delay a sale

Maewyn Succat

https://www.boards.ie/discussion/comment/120907813#Comment_120907813

Great to hear from someone else who has done similar.

I definitely wouldn't be against going for a 20 year mortgage as long as there was the option to overpay so it could be paid off sooner.

Citygirl1

https://www.boards.ie/discussion/comment/120908000#Comment_120908000

Sounds like you're getting your ducks in a row. Best of luck with finding a new place!! Being able to draw down the mortgage, without being in a chain, gives you so much more flexibility. And, puts you in a better position than any other bidders who are reliant on a sale.

And of course, you have some time to do any work on the new place before moving in. It's so much easier to put down flooring, carpets, paint etc, before heavy furniture is in place....

pjordan

https://www.boards.ie/discussion/comment/120910127#Comment_120910127

AFAIK, unles you tie yourself into a fixed rate mortgage, the option to overpay or pay off lump sums periodically on a variable mortgage is always an option open to the borrower.

o1s1n

https://www.boards.ie/discussion/comment/120920150#Comment_120920150

Some fixed rates will let you overpay too, Avant 'One Mortgage' for example lets you pay off 10% extra of your balance every year.

Shoog

Just going to say been morgage free since our early thirties has given us a stress free and flexible life. Life has been good and now at 56 we are moving back to town morgage free still.

The stress of a mortgage tying you to jobs which you may or may not enjoy. Having the flexibility for one of us to take time off until the two kids were in school.

Mortgages are a burning tyre around your neck.

You also need to factor in college (if your kids go). It won't be cheap and SUSI won't be helping you with that salary.

I know that's years away but still.

JCN12

Op,

Seems like a good idea now, but the bigger house will just become another thing, and the extra space may well just fill up with more stuff.

For outdoor fun, take the kids to parks and forestry settings, be present with them. For what could be the mortgage payment, you could take the kids around the world. Show them things, take them to Africa, Asia, the middle east. Give them experiences that will stay with them.

What will be the opportunity cost?

Beefcake82

Op,

I think a lot depends where you live now and amenities you have access to. You have 2 young kids, could they not be signed up for adventure parks, sports clubs or other activities which would help in relation to the garden space at home? Also can you renovate your attic space or other space you have to increase area in home/garden to use while also increasing your property value?

Also the market is currently bloated at the moment, prices are way too high for actual value of properties. At €400k most people are in bidding wars as this tends to be a lower value for homes in current market, so you need to take into consideration how much more you would be willing to spend over the cap you have set.

Right now you are in a very comfortable position with no mortgage to pay and you want to minimize any potential disruption to your lifestyle if you upgraded and suddenly something happens that puts that upgrade at risk. Both of you are in your 40's and from a health perspective if something was to happen to you or your wife it would put at risk a new home so do you have a contingency if that were to happen? Also (knock on wood) if something was to happen to one of your children where they needed extra care/medical treatment.

You are in a very enviable position, i just believe there are more angles to view this change than just home and garden space.

o1s1n

https://www.boards.ie/discussion/comment/120920278#Comment_120920278

It entirely depends on your situation.

Being mortgage free and happy only really works if you are mortgage free in a house that suits your family's needs.

Shoog

https://www.boards.ie/discussion/comment/120920523#Comment_120920523

There are lots of people get the bigger house for the few brief years they have children and then they are rattling around in a oversized house that's hard to heat and needs lots of ongoing maintainance. They end up living in the kitchen.

o1s1n

https://www.boards.ie/discussion/comment/120920549#Comment_120920549

Not sure if you've noticed, but many children aren't moving out of home till their mid 20s and in some cases, early 30s. I'd hardly call that 'brief'.

Definitely long enough to want to avoid cramming everyone into a tiny house.

Even at that, it's also possible to downsize when you are older once you no longer need the extra space.

xyz13

No brainer: mortgage free.

mrslancaster

https://www.boards.ie/discussion/2058306289/mortgage-free-or-bigger-house

I suppose it depends on the size of your current house OP and whether you might have more children in future. Also, when you say you don't have a garden do you mean no front or back garden - do you have any outside space, even a small patio area?

Agree with others that mortgage free would be the way to go for me, not having that chunk of money going out every month means money for other things in life. OTOH, gardens are great, we have a small one and I love it, so can understand why you'd like that but they need maintenance and realistically, we don't get to use outside space all the time because we get so much rain.

Can you extend up and/or out to change your current house and make it more suitable for your families needs? Weigh up the costs of legal fees to buy and sell, auctioneer fees and other moving expenses against the costs of changing your current house, and, don't forget your neighbours - people move house and end up with all kinds of problem neighbours that they didn't have before.

Is the new house near your current home? Does it have the same services and facilites you have now, transport, schools, medical services, shops etc and would it have the facilities and activities your children will want as they get older. Sometimes having all the facilities and services on your doorstep makes up for having a slightly smaller house.

Another option is to stay put and consider investing in a small holiday home - time spent in a rural / seaside place when children are young is fantastic, especially if you live in a city or other built up area, the memories are priceless. If you did buy a holiday home, in years to come it could be sold to fund college education, retirement travel, etc. We couldn't afford to buy a holiday property but we did have a mobile home on a serviced site for years - kids loved it and we had many fantastic 'staycations' with grandparents, extended family and friends. Easy to get to by car, bus or train, no airports or ferries, throw everything in the car and take off for a break at weekends or during school holidays. Highly recommend it when kids are young.

Being mortgage free gives you a lot of options. Best of luck.

what_traffic

https://www.boards.ie/discussion/comment/120910127#Comment_120910127

Ah ya - do what ever suits ye best. The mortgage market is a different beast today, alot has changed in the last year.

We didn't move out of the neighbourhood so didn't have hassle of moving schools/ creche etc

Would recommend to create a list of all the pro's and con's and then weighing it all up.

Maewyn Succat

https://www.boards.ie/discussion/comment/120920150#Comment_120920150

The option to overpay would definitely be important as it would reduce the length of time and the amount of interest to pay.

Maewyn Succat

https://www.boards.ie/discussion/comment/120920278#Comment_120920278

It's definitely a great position to be in. We're lucky enough that both kids will be school from September and we're in jobs we don't hate or feel tied to.

Well done on your achievements and best of luck with the move.