First time buyer- can I afford it!

80schild

I am considering taking the plunge onto the property ladder. I have spoken to the bank and have been offered a £100 mortgage of about £85k with monthly repayments of £500.

I currently earn £1200 per month and have essential outgoings of about £350

My boyfriend will not join the mortgage as he is a student but he will pay me about £250 per month

Do you think I can afford it?

sarah_elton

I think you meant 100% mortgage?

There's two parts to consider:

1) Up front cost of buying - you will need to pay solicitors fees, mortgage fees, removal costs, buy anything 'housey' you don't have (furniture? white goods? where are you living at the mo and how much do you have?). You're probably talking in the region of £3k as a minimum. It's amazing how much it keeps totting up.

2) Ongoing monthly costs - really hard to say based on the info you give, but as a minimum, list the following outgoings monthly:
Mortgage repayments
Service charge (if buying leasehold, allow £50-60)
Council tax
Electricity/gas
Water
Phoneline
Broadband/Internet
TV license
Home insurance
Car running costs, if applicable
Mobile phone
Any debt repayments, if applicable
Food

And see how much is left over, which is for spending/saving.

Do you currently live at home, or 'out'? If the former, scout the boards for how much utilities etc will end up costing.

As a rough, rough guide, I net around £1,600 per month, and will be repaying about £630 (mortgage plus morgage repayment insurance) per month, and that's just about affordable for me (bearing in mind my inability not to shop at all )

Hope that gives you a way in to working it all out...

jobbingmusician

Also, whereabouts in the country are you? Is there ANYTHING for sale at the £85k mark?

(Can you tell, I'm from London. Nothing much under £200k here )

PoorDave

The rule of thumb always used to be to have you monthly mortgage payments being at around 1/3 of your net monthly income. On this basis, everything else should sort itself out from the remaining 2/3.

You are bringing in 1200 + 250 from boyfriend =1450
Mortgage = 500
So it's about a third. Leaves you 950 - 350 = 600 spare for other expenses over your existing essentials.

In my experience, you need to keep some money saved for when things go wrong, especially if you're moving from a furnished rented place or living with parents to an unfurnished house you own. Suddenly ANYTHING that goes wrong with the house or appliances etc has to be paid for by you!

Not that i want to put you off! Owning your own house is a great feeling