Experienced mortgagee's - Will we be overstretched? IYO??

thriftychap_2

My partner (23) and I (27) are aiming to move in the New Year. I’m a teacher, she a nurse. Combined income of 55k at present but this goes up each year by a few thousand. By the time we move it will be 60k. I’m pretty clued up on mortgages so won’t need any lectures on that front. Some online calcs say we can obtain a mortgage of 160k, other 245k (which is mad). IMO 200k might be optimistic but we will not know untill we apply so for the purpose of this post lets say the banks deemed it affordable.

We will have 25k in the new year as deposit (equity in our apartment) This would allow us 10% deposit at a MV of 250k. However being debt adverse I would like at least a 15% deposit so intend saving more (slightly more favourable LTV ratio). The kinds of houses we are looking at are around 220-250k (champagne taste, lemonade money). So...... at say 240k this means a deposit of 36k and a mortgage of 204k (damn that figure scares me).

Mortgage of 204k over 25 years @ 4.39% = £1133.
After pension, student loan repayments and ordinary deductions our combined take home is £3100 at present. The repayment is more than a third of our current take home which scares the **** out if me. I have calculated our outgoings in the new home:
Water

60

Gas

60

Electricity

60

Council Tax

125

Building & Contents Ins

25

Life Ins

20

Car

250

TV License

15

Phone & Internet

20

Mobile Phones

50

Gym

60

Petrol

100

Food

200

Her money

200

My money

200

Invest

200

Total - £1645

Based on this it leaves us with only £455. (I like over paying our mortgage)

I would like to know from the more experienced members their opinions on size of mortgage. Between you, you have had many mortgages and a lot more life experience of dealing with ups and downs (rates, children etc) than we have. Do you think we might be biting off more than we can chew based on these figures and your experiences?

somethingcorporate

Looks doable to me - just make sure you get a long-term fixed rate to keep those nerves under control!

My 2 are up in the next 4-5 years and I am already starting to panic! :beer:

themull1

You will be fine on that salary/outgoings.

GMS

If you need people to tell you it will be ok then you really need to have another look at it. Only you know what your situation is so only you can make a decision.

getmore4less

Easy way to find out is live as if you had this new budget and set an agressive savings scheme.

Make sure there are no long term monthy commitments tat are not saved for in advance.

Don't forget the costs and your equity migh not be quite as high as you hope.

With £11k more deposit and say upto £10k costs you might struggle to meet your target of a move in 9 months if you havn't started saving.

Also do a forward plan for major expences required for the next 5+ years, sure there will be white goods and a new car needed at some point.

opinions4u

What's the plan for maternity leave and childcare?

On the whole it looks fine, but you should look to have a contingency fund in place, ideally covering 6 months' net pay.

thriftychap_2

GMS wrote: »

If you need people to tell you it will be ok then you really need to have another look at it. Only you know what your situation is so only you can make a decision.

This was precisley the kind of reply i was hoping to avoid. It angers me that i am asking for peoples opinions based on their experiences so I am able to make a fully informed decision - with their opinions to assit this in a small way and i receive that reply!

At no point did i ask for anybody to make a decision for me or tell me it would be ok.

I happen to value the experiences of board members and was looking for them to highlight any life experiences they have encountered that i might not consider but influence affordability in the future.

thriftychap_2

opinions4u wrote: »

What's the plan for maternity leave and childcare?

On the whole it looks fine, but you should look to have a contingency fund in place, ideally covering 6 months' net pay.

Yes - a valid question. The OH would work part time at worst. Sister looks after children so paying her is also an option.

Worst case scenario - She works part time and we pay £300 a month childcare. However our earnings in 5 years should be about 75k.

To be totally honest this is my biggest worry - along with possible need for a 2nd car if we move.

thriftychap_2

getmore4less wrote: »

Easy way to find out is live as if you had this new budget and set an agressive savings scheme.

Make sure there are no long term monthy commitments tat are not saved for in advance.

Don't forget the costs and your equity migh not be quite as high as you hope.

With £11k more deposit and say upto £10k costs you might struggle to meet your target of a move in 9 months if you havn't started saving.

Also do a forward plan for major expences required for the next 5+ years, sure there will be white goods and a new car needed at some point.

Very valid points - either way we will have at least a 15% deposit - if this means we have to delay a while so be it.

We are hoping to have ome money left over from our wedding then save £1000 pm - with equity this means up to 30k but at least 25k.

GMS

A mortgage is a massive commitment and should not require the approval of an internet forum in my opinion.

Soem people would be happy with 50% plus of income as their mortgage payment whilst others would say 20% maximum.

Everybody is different. Some peopke will class a holiday as a weekend in a B&B with others saying a holiday must be 5 star all inclusive in the Maldives.

What is good for one is not always good for another.

I do not mean to anger you but when it comes to a huge life changing decision you need to be happy with it for yourselves, not because somebody else says so

Flightman_2

You say your wages goes up by a few thousand each year. As your both public sector workers, and given the Govts current stance, I don't think this is realistic going forwards do you?