Mortgage advice, please

jeffh2007

Hello there,

I'm hoping someone will be able to give us a bit of advice before we head to the bank manager...

We would like to move to a house, now that we have a baby.

We own outright a 1 bed flat, worth £150k in 2003.

We have savings of £90k.

I have a salary of £30k pa, my wife has a salary of £34k (but this will drop accordingly when she returns to work 2 days a week).

What price house might we be able to afford? Ideally we would rent the flat out - is this realistic? We live in central Brighton, and at the height of the market, our flat would have been considered to be very desirable.

Many thanks for your help!

Jeff

Cannon_Fodder

No mortgage on the flat, so you can do what you like with it.

Sell and have £150k+ cash in hand - even with the house price crash that should be a low figure.

Land Registry is usually a reasonable guide, looks like it might be around £200k now.

[IMG]http://www1.landregistry.gov.uk/houseprices/housepriceindex/report/default.asp?g=1&gt=1&a=Brighton+And+Hove&s=01 January 2003&e=01 January 2010&t=1[/IMG]

Or re-mortgaging into Buy-To-Let could free up funds to direct at the house purchase, say £100k to avoid over-leveraging while getting used to reduction in income - your rental income will largely have to go towards servicing the BTL mortgage.

3x, maybe 3.5x, joint salary. Which varies with the drop in income. To 2/5ths?

£150k mortgage looks doable after income drop.

Plus however much of £90k you want to use as the deposit. Say £50k.

Total deposit varies between £150k and £250k. Either of which should give good deals being under 50% LTV.

Total spend = £300k to £400k depending if you sell or rent, get a good price etc. Unless you choose to max out the BTL, or can be creative about your wife's plan to reduce hours...

Additional opinion - don't just visit your bank manager, shop around.

What you can afford depends on your spending habits. What you can get may well be different, and you don't have to take it all!