First Time Buyers...can we afford it on £1500 a month

deanorules

Hi guys

Me (age 26)and my partner (23) are looking to buy our first home in the next few months, a house around about the £100,000 mark. We have around £15000 saved up for deposit and other costs such as solicitors fees and buying furniture. We both have currently live at our respective parents house and have an income between us of around £1500 a/month after tax. We have been to see a broker, who has advised us that we could take up a mortgage of £90,000 with a 10% deposit making it 100k over 35-40 years costing around £520-530 per month fixed for five years.

What we are both trying to find out is will we be able to live comfortably off what we earn?

We have researched other monthly cost but are unsure of how much they might be. For example the cost of electric/gas bills, council tax. (We live in tees valley area) We have budgeted for the following:

monthly Income: £1500

Outgoings:
Mortgage £520-£530
buildings/contents £100??
council tax £100
gas/elec? 100?
water 30??
food 200
car fuel 50-100 (we don't live far from work)

So according to our estimations with should be left we around 300-400 pounds

Any help would be much appreciated, as we are agonizing about whether we can afford it or not.

Thanks

supersavingsharon

Hi, i think you are over estimating contents/buildings this will prob be approx £30. You do need to factor in telephone/mobile costs and other costs incurred with a car. I also think your food bill looks fine for two people. As you are both first time buyers you are in an ideal position to get a bargain as you seem to have a mortgage agreed in principle and there are loads of people who would love to sell to a first time buyer as you are not in a chain. Is it worth holding out a little longer as most financial papers seem to agree that the housing market as a long way to fall in terms of price? All the very best in your search, i think you've done a brilliant job in saving 15k. PS dong forget holiday/entertainment expenditure:beer:

deanorules

Thanks for your help. We factored in stuff like you mentioned. We have considered waiting for another six months to see if the market does what you say, and mortgage rates do drop. We're a bit unsure as to whether to make a move now or wait a little longer for prices to drop because we're excited at the prospect of living together as we have been together a while and just got engaged.

Have I got my utility bills right? Is it that sort of amount?

On a unrelated topic, is it cheeky to bid £87,000 on £ 100,000 house?

Cheers

supersavingsharon

HI yes i think your utility bills look fine. It definately isn't cheeky to offer 87k on a 100k house, they can always say no and you can always increase the offer if necessary. You are in an ideal position, you will never be a first time buyer again and with no chai:money: n and a mortgage agreed you are a buyers dream! It is really difficult to know what to do, buying your first house is so exciting and no one knows how far prices will fall. Shop around if you see something that you feel is good value, put a much lower offer in and fingers crossed it should pay off. People don't expect to get the asking price, a house is only worth what someone is prepared to pay for it and autumn/winter is not normally a busy time for house sales so you coud get a bargain. Hope this helps

woozywendy

Have you looked at the budget planner? There a items on there I had forgotten about when I did my budget.
Hope it works out well for both of you.

Richard019

Given the figures you've got for the set prices you should be able to afford it, I suppose it depends how often you like to treat yourself. As a single person with £1k take home I was managing the following

Outgoings:
Mortgage £520-£530 (£550)
buildings/contents £100?? (£20 - good deal through my mortgage provider and I don't have anything worth more than £1k)
council tax £100 (£75)
gas/elec? 100? (£70)
water 30?? (included in my council tax)
food 200 (£60 - I have a freezer full of reduced stuff and don't have takeaways very often)
car fuel 50-100 (N/A)

I've also got Sky (£45pm for Sky +sports, phone, and broadband).

To offset for the car costs, I've also probably spent over £1,500 on travel/food/tickets for football and connected nights out (15-20 weekends away, so it's not as bad as it looks).

With an extra person I can't those costs going up by £500pm when so much of it is standard cost rather than being dictated by number of people.

Richard019

I should point out, from that £60 I do tend to eat very well, it's just a case of knowing when to buy things and where to buy them from. I work in one cheap supermarket right next to a big supermarket and live near a 3rd chain so there's not many BOGOF/lower price deals I miss out on.

leimichellecat

You can do it!!! However concider the housing market, you don't want to be in negative equity before you start! I earn £1600 a month...
£635 on rent
£130 council tax
£160 utilities, Virgin media and mobile
£200 car loan, insurance and petrol
£80 food
£50 dog insurance, food and various other small animal catering
£20 content and work insurance

That leaves about £300 for fun, silly things and ofcause savings! i also support OH who on short term sick with no benifits.

PROLIANT

Jesus, I am living in a Housing Association house and pay £300 per month rent, I can’t afford a mortgage on my salary as an IT Manager I take home £1207 after tax and I am just getting by, £520 per month for a mortgage would mean I would have to starve. Good luck in getting your new home.

skintchick

Don;t forget car costs - insurance, tax etc., and things like holidays, new clothes, toiletries, boiler servicing, general maintenance...

I don;t think you've done a very comprehensive budget.

SimbaSimon

Certainly seems do-able. Just remember interest rates can go up after you 5 years and factor in whether you'd have enough if it went upto say 8% or higher? Would that still leave you enough?