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Which option is best - buy the dream home now or wait a few years?

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  • Which option is best - buy the dream home now or wait a few years?

    Hi everyone,

    I've got a conundrum and I don't know what to do!!

    Currently I own my own home and have a mortgage of $120k - it's valued at $310k.

    My partner and I will have paid it off in 4 years time as we are currently paying it off at $400pw. However with a new baby on the way we are finding this amount to be a bit of a struggle on one income plus working for families.

    We have five children and the home we are in is only 3 bedroom. So it's a tad cramped.

    So I thought we should sell and buy a bigger house....BUT it's been three months and we've had no interest and now i've found out that i've been made redundant from my job effective from April.

    Therefore I thought we should remortgage our home and buy a bigger house up the road for $360k - we have 30k - kiwisaver as a deposit, as my partner and I weren't together when I brought my home he still has kiwi saver to access.

    I did the math and that works out to be about $220k on each house respectively. It would mean remortgaging my house and chucking an extra $100k on it and extending the mortgage for 30 years.
    We could rent out my home and rent would cover all payments i.e. mortgage and insurances.

    Our new bigger home would be a 30 year mortgage too and so our repayments would come down to approx $260pw instead of our current $400. But we won't be mortgage free in 4 years - it'll change to 30.

    NOW the other option i'm thinking of doing is this...

    Stay cramped where we are for four years.....and be mortgage free at the end of it and purchase a cheaper 3 bedroom property down the road as an investment property instead for $240k with a $30k deposit. In four years time when we are mortgage free - then consider remortgaging across both properties and buying a third larger bigger house - although prices may have esculated by then? Jut don't know. This means we will own three homes instead of two and will have a big more equity.


  • #2
    This is really about whats best for you scenario. 5 kids + 2 adults in a three bed would be a struggle for most in terms of sanity. Financially though, cramping up and just toughing it out is admirable as well - should you do that - only you can answer. If not, buying a bigger house or extending your existing one are the options.

    Why no interest in your 310K home vs the 360K one up the road - is there plenty of interest in that one?

    What are your job prospects in the long term - can you earn sufficiently to repay for the next 30 years - only you can answer.


    • #3
      Suggest don't stress too much about the 30 year thing. You have already found out that mortgages get easier over time - values rise, rents rise, incomes rise, children grow up, principal gets paid down - though as a counterbalance interest rates are likely to start rising.

      I do think though that for the keep both option you could do the sums really carefully under different scenarios and over several years. Those scenarios to take account of announced or probable changes to the rental sector (ring-fencing losses, bright-line test, more and more and more compliance and associated costs), maintenance and tenant hassles. If this would be your first rental, take a look at some Tenancy Tribunal decisions ...


      • #4
        Wait some time and then buy your dream house, you can invest your money in stocks for example and wait


        • #5
          i waited 2 years, in that time, my dream house went from 500k to 1.2 mil


          • #6

            don't chase your dream home

            when it's time

            it will come to you

            and will stay
            have you defeated them?
            your demons


            • #7
              1) get a new job asap
              2) keep selling your existing home. If you don't sell it, then you can't buy a new home can you?

              I think buying a new home is not a priority right now given your situation...
              Gary Lin Property Coaching


              • #8
                Originally posted by jack2016 View Post
                i waited 2 years, in that time, my dream house went from 500k to 1.2 mil
                where did the price of property more than double in 2 years?