sensible affordability?

mp80 · 11 July 2017 at 11:14PM

Hi

Me and the missus have been bickering about moving. We currently pay about 600 quid a month on a place.

She wants to move to a place that would cost about 1500 quid a month, with all the hikes in associated bills, stamp duty of 11k and deposit of around 40k, which would be taken from the equity of our existing home - we have 50k in savings which would cover the stamp duty.

I'm a 'glass is half empty' guy which can come across as overly negative. We earn 185k between us, which equates to about 9k per month net once deductions, childcare contributions, etc are taken out.

We will have no debt except one year to run on a car loan, which I could settle.

This would be a home for a decade or more ideally; the worry is it's top of value as it's been extended and renovated, but that's not a bad thing as we are extraordinarily busy with work, child, life! The other thing, do I sense a sniff of a recession on the way - big incomes are hard to find!

What do ya reckon? Go for it? Or stick with my conservatism?

Thanks

MP

ThePants999 · 12 July 2017 at 12:27AM

Sounds fine to me, as long as you're not concerned about job security...

FBaby · 12 July 2017 at 6:15AM

How old are you? There's no right or wrong, you need to be on the same wavelength. OH have opted for being mortgage free as a priority but that's because we can't wait to be in a position to not have to rely on our stressful jobs.

The idea of knowing that whatever happens to us, we would be able to keep our home is worth a lot more to us than living in a mansion.

Debtslayer · 12 July 2017 at 6:21AM

I presume you've set a house buying budget before you've started viewing properties? Is this house top of your budget?
What are your reasons for moving? Is it just to get a bigger house for status? Or do you need a bigger house / moving to a better location?
You say this would be a house for the next decade but what then? Would you be downsizing?
Sit down and do a budget for new house, what mortgage payments would be, estimated fuel bills etc. You can find out council tax costs
Then see if you can realistically afford it and would feel comfortable taking it on. If something happened to one of your jobs would the other person still be able to pay all the bills?
If you don't feel comfortable with this then I wouldn't do it, maybe compromise with a property somewhere in the middle of what you have now and this?
Also do you want to just be paying for a property or do you want other things as well, holidays etc?
Only you know what your expenses and outgoings are
Good luck and let us know how you get on

Tiners · 12 July 2017 at 6:43AM

I also consider myself very conservative, but those figures (£1.5k mortgage from a £9k net income) sound comfortably doable..

My conservatism would come more into play with regards to buying somewhere with a high LTV right now, I think I'd be inclined to sit tight and see what the market does for the next 6-12 months.

glasgowdan · 12 July 2017 at 6:43AM

Debtslayer, if you read their post they have stated mortgage payments of 1500 and monthly net income of 9k.

If one of you lose your job you'd still be able to afford the payments comfortably so I see no problem with buying this house, assuming you like it and want to live there.

mp80 · 12 July 2017 at 7:02AM

Thanks all - w.r.t job security, I guess it's as secure as it's going to get, I've been with my current employer for 7 years, I'm in a relatively key position up at the top of the senior management. I have 3 months notice and the OH has 6 months.

I'm 37, wife is 33 - we have an 18 month old, with plans to add 1 more next year. Reason for moving, bigger house is required even now, we're at the limit of space now, so having another one would be impractical, this place has been extended to the limit (only a small place) and we need to be in a better area than we are now for schools, which admittedly is a bit of a way off.

Rambosmum · 12 July 2017 at 7:49AM

There's not right or wrong. We are currently in the process of purchasing a house with a mortgage of around £1k per month and a net income of £3800, but we've only just got our salary's to this, so are used to living more frugally.

If you save a lot of you income you'll be fine but if you live to your means, you'll feel the pinch.

chelseablue · 12 July 2017 at 9:27AM

Id say go for it and I'm conservative when it comes to money.

We take home £4,000 a month and our mortgage is currently £722.
Plus the £860 a month childcare and we manage fine

TBagpuss · 12 July 2017 at 10:42AM

Based on the figures it doesn't seem unreasonable but as RambosMum says, how it will feel to you depends a bit on what your financial lifestyle is at the moment. Paying £900 a month more out of your income if you don't currently save anything close to that amount each month now is going to feel as though you're stretched.

If you're unsure, why not start overpaying your current mortgage by £1,000 a month (or put that amount into savings, if over payment is not an option on your current deal) for a few months to get a feel for what your budget will feeel like after the move?

Bonus is that you get to pay down the mortgage and therefore give yourselves a bigger deposit if/when you do move.

i moved 3 years ago and effectively doubled my mortgage. It was a bit scary at the time bu I'm glad I did it, I have a much nicer house, closer to work so a short commute. I had however been over paying on the mortgage on the old property, and putting money into savings, so my actual outgoings changed very little when I moved, it was just that I started paying more per month towards the mortgage and less in overpayments and other savings.

As you mention that you are planning a second child I would also suggest that you look at what your budget will be if either or both of you take parental leave, and if you have to start paying for additional child care, so that you have a feel for how that will change things and whether that is likely to leave you feeling overstretched.

downhillfast · 12 July 2017 at 10:52AM

We pay £1700 a month mortgage on a take home of approx £4.7k a month between us... unless you live a very lavish lifestyle and spend like it's going out of fashion you should be fine. We still manage to live well and save.

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sensible affordability?

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