Re: Can We Afford This Property?

hall2056

Hi, we have been house hunting all weekend,as we are on a company relocation. We have viewed a dream house, with an asking price of £410k!

The GSP on our house ( guaranteed sale price from relocation company) is £315k. We do not have to budget for any moving costs, including stamp duty, as this is included in the relocation pakage.

Our current mortgage on this property is £78k, with £30k due to mature in March 2007, after 25 long years.

We intend to make an initial offer of £370k, however the property is in a prime location and has only been on the market since February.

My question is, if we have to pay the fully asking price will a mortgage lender have any issues on providing the new sum, i.e. - £78k plus (£410 -315) £95k = £173k? This will drop to £143k in 2007 when the £30k falls off.

Our joint income is £47.5k, and only other major outgoing is a car loan £235/ per month. Again this finishes next year.

I know we can afford it as we currently save between £700 to £1000 per month.

Any guidance welcome please?

Thanks

hall2056

herbiesjp

On the basic details you have supplied there will indeed be soem lenders that could look at this for you - without having any knowledge of your whole scenario it ould be difficult to say with ay certainty though.

I think a word wth a whole of market mortgage adviser would be good to help you number crunch - as even though you might be able to get the mortgage agreed you would need to make sure it is affordable to you.

itsakidsworld

It is important that you speak to an IFA who will clarify your situation in greater detail. However, for information for you to digest, a quick calculation is as follows;-

Basically you want to borrow an extra £95,000 which will cost you in and around the amount you say you save each month. At 5.5% mortgage the cost would;

0VER 10 YEARS CAPITAL AND INTEREST................. £1050.28
OVER 15 YEARS CAPITAL AND INTEREST................. £ 788.70
OVER 20 YEARS CAPITAL AND INTEREST................. £ 662.46

Obviously if rates go up then the cost is higher, with a 10 year loan as above at 8% going upto £1179.81. Plus the cost of the original loan you already have would be higher.

Hope this information helps you along the right path.


IAKW

hall2056

Hi, thanks for replies, will arrange a meeting with an IFA for later this week, before we put in a offer.

However I thought I would post on this forum to gain some feedback on stretching ourselves and to understand lending criteria. It appears this is okay providing we are comfortable with repayments!

hall2056