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Done it the worng way round or was it the romantic way ??

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Hi All

Done it the worng way round or was it the romantic way ?? Anyway Have good Job in the City, Great Wife 2 wicked kids . We have been renting for the past 10 years in and around London and Brighton, now we are establised on the south coast i feel it is time to lay some roots.

Main issue is after COST of living is taken into concideration we are left with apx 200 per month. Wife Is looking to start work in a few years after the kids are both happy at school

Here are some figures

Income 38K take home 2190 per month - 250 travel loan so 1930 per month
Ex 1800 per month reduces by £219 in 20 months (Loan)
Rent 700

Looking at poperty with 3 beds in our area is 180K min
!!!!!! all dpot
I do get Bounes of around 6-8 Grand each year but alwas seems to get eatin up over Xmas and the new year. However this year we are spending a lot less and may see some of it this year.

Any ideas would be welcomed

I thank u

Comments

  • MortgageMamma
    MortgageMamma Posts: 6,686 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Hi there,

    It is possible to get a mortgage for the amount you need on your salary, but you do not say if you have a deposit or need a 100% mortgage. I know this is your business, but I would say if you do get a mortgage perhaps your wife might need to get a part time job so things won't be so tight for you.

    If you want help working out what mortgage payments would be let me know.
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Sounds like you are doing a great job with your life so well done on that point. Happiness and security are the most important things over money so keep that alive!!

    Property buying? Here are some figures below for purchasing on an interest only mortgage. Is this better than renting? Property goes up and down so it depends how you see the next few years going. I feel like alot of others that we are at the top end of prices so maybe not a price crash but a consolidation of prices to let wages catch up.

    INTEREST ONLY ON THESE AMOUNTS ARE;

    £180,000 @ 5% INTEREST = £750 PER MONTH

    £180,000 @ 6% INTEREST = £900 PER MONTH

    £200,000 @ 5% INTEREST = £833.33 PER MONTH

    £200,000 @ 6% INTEREST = £1000 PER MONTH

    Capital and Interest would be higher obviously but you are paying off the loan.

    You then have running costs like property insurance and repairs to consider but hopefully you will manage to jump aboard the property train!!!!

    Good luck
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    It was the romantic way and not a bad one. :)

    Time for a budget, living to that budget and finding out what you can really manage to afford to pay on a mortgage, while you save the extra to get a bigger deposit. Once you know you can live to this for three to six months, or not, you'll be able to decide what mortgage you can really afford to go for.

    With a 900 (700 rent plus 200 extra) monthly payment at 5% for 25 years the repayment mortgage amount is 154000. At 4.5% it is 162000. Going to a 30 year mortgage term 900 a month would be the payment for a 1770000 mortgage at 4.5%, 168000 at 5%.

    So you simply can't handle the payments on more with the figures you're giving unless you're using some bonus or are able to reduce spending further. Pay off the travel loan and it would be doable (1150 a month is payment for a 196000 mortgage at 5%). Use the bonus and it would be doable. You're probably going to need to do both. You cuold use an interest only mortgage until the travel loan is paid off, then start making overpayments with the travel loan money to start repaying the loan capital.

    Time to use all the money saving tips here to cut your costs and start getting a good deposit built up, including this year's bonus in it. If the travel loan is one you can overpay to reduce the total cost, doing that is probably a good idea so you can free up the money faster for mortgage use.

    The bonus this year should probably mostly go to the bonus of owning your own home. Don't forget the immediately payable fees and stamp duty in your calculations - those will require the whole bonus.

    The mortgage experts here will be able to find you a mortgage to do what you want so I've concentrated on whether it's really affordable for you and what you should be thinking about doing to make sure it is. I suggest that you ask them to tell you how much you'd save if you had a 5% or 10% deposit and use that to help you decide on whether to save for it or buy quickly.
  • Thanks no we have little to know depot and what will will have would be tied up in fees etc. How easy is it to arrage a 100% morgage say over 25-30 years. Dount want a very long tie in as Wife will be contibuting with the next 3-4 years and would like to increse repament /reduce the intrest etc

    Thanks
  • MortgageMamma
    MortgageMamma Posts: 6,686 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Hello there

    100% mortgage is possible but the main thing that will dictate whether you can have one of these or not is your credit rating. how old are your little ones? I have two girls 9 and 5 and a little boy who is two. child care fee's are crippling and on your salary you wouldnt get any help towards them either, I took a couple of years off with my girls as was in same position. Can't do that with my little boy though as I can't handle him he's a nightmare sometimes!
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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