Things are suddenly dawning

Dithering_Dad

Is this a wind up?

It smacks of someone posting "I am thinking of putting my hand in a fire, will it hurt?"

I just can't believe anyone is this daft - sorry to OP if you are. I suspect this is merely a troll trawl.

moneysavinmonkey

what is the new mortgage amount going to be in reference to your + partners wages?

Previously lenders were happy to lend 5x joint incomes, but these multiples have come right down now - x3 is more realistic. Is this going to allow you to borrow enough? (the numbers look tight going off the £650 estimated repayment = approx 100k mortgage)

I think you need to factor in that you are currently going overdrawn by half you joint salary and yet you want to triple your mortgage - along with increased costs for utilities + council tax etc. If it doesn't sound like you can afford it to us- in these times of risk adverse lenders they are going to pick up on this when they go through your financial and you'll struggle to get a mortgage. Even if you do, expect arrangement fees of at least £1000.

You also state the new house is 'uninhabitable' - so where will you live then? and are you sure that 15k is going to be enough to make it habitable - rule of property ladder for budgets = think of a number, double it then double it again! What if rennovations end up costing 40k or more?

Baz_2

If you can afford the extra £400 per month on the repayments then go for it. Only you know if you can reign in spending elsewhere to make up for it. You need a detailed monthly budget to see if you can manage or not.

Your LTV is low enough.

I'm assuming your income multiple is good, i.e 3.5 joint salary? £2200 net = £2600 gross = about £30,000k pa. So you would need 3.5 times, which can be done quite easily.

Most of the costs can come out of the equity, even the removals can come out of that if you wish by using you overdraft and paying it off once you get the cheque from your solicitor.

If you stand still forever you will never get anything you want.

Just remember most on here are doom and gloom merchants.

pinkshoes

Your budget will be £75 (equity) + 3x joint salaries. (the other equity will be for moving costs, stamp duty, solicitor fees, EA fees etc...).

Personally, I think if you can't even live within your means now, it would be suicide buying a bigger house and taking on a bigger debt, and you would risk being reposessed.

penguine

As lenders are getting more strict about who they lend to, it's possible your regular use of your overdraft may be a problem for you in applying for a mortgage. As you are just at the stage of considering trading up, perhaps it would be more sensible to wait another year or two and in the meantime learn to live within your means (or better yet, below your means), building up some savings, so that you will be better prepared for the larger outgoings that will come along with a new property. Another advantage is that in the meantime, as prices come down, the gap between your current property and the next one should become smaller.

Sonofa

Dithering_Dad wrote: »

Is this a wind up?

It smacks of someone posting "I am thinking of putting my hand in a fire, will it hurt?"

I just can't believe anyone is this daft - sorry to OP if you are. I suspect this is merely a troll trawl.

DD I have seen previous warnings about you and your various other guises. If you don't like what I'm talking about don't be a P***k just go somewhere else.

I'm new here, yes, but if you'd bothered to look at my previous posts, you'd see that I'm genuine, not trolling.

If what I'm asking is so ludicrus to you then there really isn't any point you and I communicating is there?

mattpearce79

Yes i thought DD comments were a little bit harsh, sonofa is merely asking advice of people who post on this board, and to me seems a perfectly honest and straight forward question!

My opinion is that beacuse you have releatively low mortgage payments at the moment you may have become a little bit lazy with your finances and not overly concerned about going 1k overdrawn and you might find that moving/getting a larger mortgage may give you the kick up the bum to start looking after your finances a bit more.

The same happened to me a few years ago when we- remortgaged to get some work done on the house, and it made me sit down and seriously look at where my money was going, and maybe like you we weren't quite as efficient as we could have been with our cash. We were a little bit worried about finding the extra money to pay for the re-mortgage, but we did it and we did it reasonably comfortably as well - it can be done.

So much so that we are in the process of buying a new house and again, as before we have had to look at what we spend, i am earning more now than i was then, but it will be exactly the same process as before, look at what we are spending and making cutbacks as necessary - less handbags and shoes for her and less boys toys for me!

Good luck!

Matt

Sonofa

Thanks Matt, I think you know where I'm coming from.

Lazy finances is it. And we are now scrutinizing where money goes.

For others estimating mortgages and income, I tend to round down income and round up outgoings, I prefer to estimate things on the safe side.

Total wages income is just over 35k the mortgage we would (in theory) be looking for is 100k. Our current mortgage is 17k:D

Other debt is minimal, 2k left on a 5k fixed rate loan ending in Feb 2010. This would free up £161 per month. Credit cards total 1500 over two cards being paid off as soon as pos. Haven't spent on one for over a year.

In theory we should have a good credit score, we've used credit but never been in trouble with it.

Wife's wage would cover the new mortgage payment. Ending the current mortgage would free up £230 from my wage. Sky will be kicked into touch. Grocery bill will be slashed (Aldi if I have to).

Oh yes, Ebay will be banished from my computer too!

Doozergirl

Your overdraft usage isn't enough to affect your mortgage application. It's only if you exceed your limit that it will affect your credit rating. You have to declare your debts which might mean they reduce the amount they will allow you to borrow but I don't think your amounts will make much difference.

If you know in your heart that you can rein back in order to afford the repayments; £650 a month paid for by one wage with another £1700 coming in is enough to live comfortably IMO.

If you were lucky, your purchase could come in under the new temporary stamp duty bracket, no?

Dithering_Dad

Sonofa wrote: »

DD I have seen previous warnings about you and your various other guises. If you don't like what I'm talking about don't be a P***k just go somewhere else.

I'm new here, yes, but if you'd bothered to look at my previous posts, you'd see that I'm genuine, not trolling.

If what I'm asking is so ludicrus to you then there really isn't any point you and I communicating is there?

My apologies, with that sort of response it's clear that you are an absolute newbie on this site and not one of the regulars who's a bit bored this week.

As we have now ascertained that you're 100% on the level, I'll pass on my advice...

As you can't afford currently to live your life without running an overdraft, you have no savings and perhaps no pension, yet you have a £35k income and a £17 mortgage (with a monthly repayment of what, £50?) I'd say that you'd be insane to buy a larger house and take on more debt until you sorted out your finances.

Before buying a new house, I'd suggest you paid off all your debt, saved up an emergency fund consisting of 3 x monthly salary and start contributing to a pension (if you're not already).

Once all this is in place then you'd be in a securer financial position to take on the increased outgoings that a larger house would require. Meanwhile house prices would have fallen further and so when you do purchase, the mortgage would be smaller.