FTB - Should you stretch to buy the best available?

superfran_uk

You say you can manage it, is that based on your situation now or with your crystal ball? I know I keep pushing this but suppose rates go up to say, 12%, that will be £2443.74 a month. Assuming you both pay pensions, that's over 2/3 of your take home pay just gone.

Think it through carefully.

MMG

The development was originally due to be finished I guess at the end of 07/start of 08 so prices would have been at their highest at that time. It got delayed for whatever reason, and the prices have recently been dropped from £320k from the start of the year.

It's right beside one of the top schools in the country, so theres no nuclear plants or anything planned.

It's just one of those houses that I couldn't honest see the need to move from in a long time, if ever!

Cissi

Sounds like you've already made up your mind

MMG

No, far from it - I'm worried about whether I'm cutting it too fine. Maybe I shouldn't even have gone to have a look at it!

PasturesNew

I'd die if I had a mortgage that much... how much would it cost to rent a house like that in the area?

"Nobody" buys at house at £270k as it's too close to the stamp duty threshold. If you had to sell it in a hurry in the next 3 years you'd probably not get more than £210-240k offered.... certainly not £250k.

I presume you won't ever have/want kids, you'll love each other forever, neither of you will ever lose their job or fall ill and your pay will increase YoY for the next X years....?

Not saying you shouldn't, but that's one scary big number.

MMG

There's nothing half decent in the area where I want to stay in for under 200k though.

Where do you draw the line? Whats not a big scary number?

Geenie

MMG wrote: »

The development was originally due to be finished I guess at the end of 07/start of 08 so prices would have been at their highest at that time. It got delayed for whatever reason, and the prices have recently been dropped from £320k from the start of the year.

It's right beside one of the top schools in the country, so theres no nuclear plants or anything planned.

It's just one of those houses that I couldn't honest see the need to move from in a long time, if ever!

New builds are always inflated and often don't keep their value. But it does sound like a very nice long term family home, especially if there are good schools on the doorstep.

But this is the thing. And I say it from experience and being a FTB similar to you in the 80's! It can work, if you think of long term goals and not the short. As a couple are you capable of not wanting to splash out the dosh to get everything perfect straight away, the right sofas, furniture etc. Because if you throw all your money at getting the place perfectly furnished inside and not save, you could get into problems.

OH and I slept on an inflatable mattress for about 18 months, and didn't have the place properly furnished for about 4 years. We saved and waited for special deals, sales. If you can reign in your spending, save etc, you may well be on to a good thing.

superfran_uk

On a monthly basis, based on your salaries and my personal experience earning a similar amount, I'd say anything above a grand a month would be too high for a first house - you don't want to set yourself up for years of eating nowt but baked beans and always saying 'we can't go out, we have a mortgage...'.

MMG

At the moment, we are renting and have beds/sofas/drawers/electronics etc. All the basics. All would be needed would be the tiling, and carpeting/flooring to some of the essential rooms to begin with.

Would like to keep a buffer of say 5k saved for a rainy day in case something were to go wrong.

Appreciate the comments/replies.

Cissi

MMG wrote: »

There's nothing half decent in the area where I want to stay in for under 200k though.

Where do you draw the line? Whats not a big scary number?

I have to agree with you there. What's a big, scary number to one person, in one part of the country, may look like a bargain in different circumstances. Here you'd be lucky to get a 2-bed flat for that amount of money; what you're describing would be about 4 times as much and out of most people's reach.
However, from what you've said earlier it does sound like it's a pretty "big, scary number" for you too, which won't leave you a lot of leeway. Having said that, if you've truly done all your calculations, including what your position will be if interest rates are in double digits when your 5-year fixed term expires, then by all means, go for it. From where I'm sitting it sounds a bit risky, but only you can work out what you can really afford.