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  • FIRST POST
    • mp80
    • By mp80 11th Jul 17, 11:14 PM
    • 178Posts
    • 32Thanks
    mp80
    sensible affordability?
    • #1
    • 11th Jul 17, 11:14 PM
    sensible affordability? 11th Jul 17 at 11:14 PM
    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
Page 1
    • ThePants999
    • By ThePants999 12th Jul 17, 12:27 AM
    • 792 Posts
    • 894 Thanks
    ThePants999
    • #2
    • 12th Jul 17, 12:27 AM
    • #2
    • 12th Jul 17, 12:27 AM
    Sounds fine to me, as long as you're not concerned about job security...
    • FBaby
    • By FBaby 12th Jul 17, 6:15 AM
    • 15,813 Posts
    • 39,535 Thanks
    FBaby
    • #3
    • 12th Jul 17, 6:15 AM
    • #3
    • 12th Jul 17, 6:15 AM
    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
    • By Debtslayer 12th Jul 17, 6:21 AM
    • 359 Posts
    • 525 Thanks
    Debtslayer
    • #4
    • 12th Jul 17, 6:21 AM
    • #4
    • 12th Jul 17, 6:21 AM
    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
    Current Mortgage 01.09.17 £113,949.32
    MFW Start Mortgage: £114,794.64
    Current MED: 2036 Target MED: 2026
    Overpayment Target for remainder of 2017: £2,000
    Mortgage overpayment savings: £473.20
    MFW No 124
    • Tiners
    • By Tiners 12th Jul 17, 6:43 AM
    • 190 Posts
    • 203 Thanks
    Tiners
    • #5
    • 12th Jul 17, 6:43 AM
    • #5
    • 12th Jul 17, 6:43 AM
    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
    • By glasgowdan 12th Jul 17, 6:43 AM
    • 2,416 Posts
    • 2,704 Thanks
    glasgowdan
    • #6
    • 12th Jul 17, 6:43 AM
    • #6
    • 12th Jul 17, 6:43 AM
    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
    • By mp80 12th Jul 17, 7:02 AM
    • 178 Posts
    • 32 Thanks
    mp80
    • #7
    • 12th Jul 17, 7:02 AM
    • #7
    • 12th Jul 17, 7:02 AM
    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
    • By Rambosmum 12th Jul 17, 7:49 AM
    • 1,434 Posts
    • 1,886 Thanks
    Rambosmum
    • #8
    • 12th Jul 17, 7:49 AM
    • #8
    • 12th Jul 17, 7:49 AM
    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
    • By chelseablue 12th Jul 17, 9:27 AM
    • 2,201 Posts
    • 2,699 Thanks
    chelseablue
    • #9
    • 12th Jul 17, 9:27 AM
    • #9
    • 12th Jul 17, 9:27 AM
    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
    Mortgage starting balance 26.02.16 £231,294
    Mortgage after Year 1 £225,078
    • TBagpuss
    • By TBagpuss 12th Jul 17, 10:42 AM
    • 5,873 Posts
    • 7,624 Thanks
    TBagpuss
    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
    • By downhillfast 12th Jul 17, 10:52 AM
    • 919 Posts
    • 639 Thanks
    downhillfast
    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.
    • lincroft1710
    • By lincroft1710 12th Jul 17, 4:20 PM
    • 9,643 Posts
    • 7,633 Thanks
    lincroft1710
    On a net of £9K pm you surely cannot be worrying about a mortgage of £1.5K pm?
    • dimbo61
    • By dimbo61 12th Jul 17, 4:28 PM
    • 9,460 Posts
    • 5,124 Thanks
    dimbo61
    Higher income = higher spending.
    Are you and your wife spenders or savers ?
    What part of the country do you live in ?
    You are on the right track MSE is the best website to start.
    Are you saving £2/3K a month
    • fairy lights
    • By fairy lights 12th Jul 17, 4:35 PM
    • 8,042 Posts
    • 26,822 Thanks
    fairy lights

    We earn 185k between us, which equates to about 9k per month net once deductions, childcare contributions, etc are taken out.
    Originally posted by mp80
    So even after your mortgage you'd have 7.5k a month
    Unless you've got a horrendous coke addiction I think you'll be fine.
    • ringo_24601
    • By ringo_24601 12th Jul 17, 4:37 PM
    • 16,906 Posts
    • 27,462 Thanks
    ringo_24601
    So even after your mortgage you'd have 7.5k a month
    Unless you've got a horrendous coke addiction I think you'll be fine.
    Originally posted by fairy lights
    Well.. the guy might be thinking forward towards the cost of private schooling.

    OP, consider how much disposable income you've got at the moment. Would you be fine with £800 less a month?
    • mp80
    • By mp80 13th Jul 17, 5:53 AM
    • 178 Posts
    • 32 Thanks
    mp80
    Thanks all for the replies. Ringo you are correct, I'm thinking 5+ years down the line, where circumstances may well be very different (high interest rates, maybe jobs different, etc) but I think we are going to try and move forward as nobody really knows and I guess you can't spend your life worrying what might be. We live in the NW and with this income we have a very comfortable lifestyle right now.

    I'm personally extraordinarily risk averse when it comes to taking any sort of very long term debt where as the OH has the attitude of trying to push on as quickly as possible, which I can understand as we're probably at peak earning so won't get a better chance.
    • mp80
    • By mp80 13th Jul 17, 5:59 AM
    • 178 Posts
    • 32 Thanks
    mp80

    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?
    Originally posted by TBagpuss
    That's quite a good idea, I think we're limited on overpayments as we're on one of those low interest rate fixed deals but worth looking into.

    I'll be honest I don't really look at my balance, I know we can afford just about anything we buy without having to forensically balance the books. I'm quite disciplined though and only buy things that would be deemed 'non essential' after a period of time cooling-off to determine if I really do want it! Years ago I would have bought anything, and be skint a week after payday
    • getmore4less
    • By getmore4less 13th Jul 17, 8:38 AM
    • 29,801 Posts
    • 17,818 Thanks
    getmore4less
    Do a SOA and work out where you are wasting money money.


    With £9k pm with a tiny £600pm on accommodation you should have oodles of cash.

    Might be you are just wasting more than you think if £1,500pm is a problem/worry.

    as above the trial run by putting aside the money now while you think about it will be the test.

    work out what the new place will cost to run and make sure you are covering not just the mortgage but the bills.
    I would aim for £2,500(less your current costs) and see how it goes,


    end of the day it is just prioritizing your £9kpm if you have been spending it all then those priorities need to change if you want the bigger house.

    Ask yourself where £108k has gone between Aug 2016 and July 2017 when less than £8k went on the mortgage?
    • Lizbragg33
    • By Lizbragg33 13th Jul 17, 10:45 AM
    • 22 Posts
    • 14 Thanks
    Lizbragg33
    We pay £1450 on our mortgage and take home pay is around £4700 so I think you can easily afford to do it.
    We were in a similar position to you last year paying a £400 a month mortgage but needed more space. I think it's the jump in monthly payments that scared us, an extra 1k a month but we are managing just fine and absolutely love our new house :-)
    I'd say go for it.
    • mp80
    • By mp80 14th Jul 17, 8:10 PM
    • 178 Posts
    • 32 Thanks
    mp80

    Ask yourself where £108k has gone between Aug 2016 and July 2017 when less than £8k went on the mortgage?
    Originally posted by getmore4less
    Accruing savings, and also unfortunately paying off a 30k loan my wife had from her parents from years ago.

    I still think you're right though, We buy £200 jeans, not £50 ones, etc. That will need to stop, definitely. Just the new house wasn't a priority at the time.
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