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

hcb42

That kind of payment would scare me to death, and our income is significantly higher.

(just my opinion)

dwsjarcmcd

Personally, for me borrowing £200+k on a joint salary of £55 to £60k is too high at around 3.5 x joint income. There are several comments I would make

- You haven't mentioned savings set aside for fees - Solicitors, stamp duty, Estate Agents etc. Are these covered seperately or from within your current savings?

- You indicate you live in a flat - Have you realistically valued it? Will it sell easily or will you need to drop your price? Flats,particularly if originally a new build can be difficult to shift.

- Budgetings - Mostly sensible but obviously it depends on your lifestyle but you have nothing for holidays, Christmas, Birthdays etc. This may be coming out of your contingency.

A few years ago, I originally 'reserved' a house and couldn't sleep for worrying about affording it. Decided to not proceed and buy something more manageable and was the best decision I made.

David

TrickyDicky101

The figures you are quoting are approximately similar to ones that my wife and I will be living with when we move (assuming nothing scuppers it of course!). If you have a fixed rate applicable for several years then I think both you and I will cope :-)

seafarers_wife

we take home 1K more than that and our mortgage scares us as its going to be £560 a month! this is our budget based on both us working, then dropping to 1 income when i give up work when we have children. we are only buying a 100K house but prices where we live in the north east we can get a reasonable 3 bed for that price.

you dont appear to have budgeted for car maintenance or is that what the £250 a month for the car is for?

so this is 4K a month take home with £500 play money between us with us both working and having a car loan thats still running for another 18 months. the sofa and the furniture is only budgeted until december this year and then that will be going into savings

mortgage 560
Car Account 185
Mobile phones 50
Pension 200
Union 20
Baby Savings 200
play money 200
life insurance 50
savings 500
car loan 256
Sofa 270
furniture 500
Council Tax 120
Gas 50
Electric 50
TV Licence 12
House Insurance 65
Sky 31
Food 200
Account Charge 25
BT 20
cat 40
water 50
Diesel 150

this is our me giving up work when we have a baby hopefully 2013, we are doing worst case senario and not inculding any maternity leave i will get so that we know we can manage on just one salary and still have the same reasonable quality of life that we've become acustomed to. i get 150 a month play money as well as the figures noted below.

mortgage 550
Car Account 185
Mobile phones 50
Pension 200
Union 18
Baby Savings 100
play money 150
life insurance 50
savings 500
mortgage overpayment 300
Council Tax 120
Gas 50
Electric 50
TV Licence 12
House Insurance 70
Sky 31
Food 200
Account Charge 25
BT 20
cat 40
water 50
Diesel100

Oh is hopeing to go back to uni in 2013 at some point to do his next certificate which means he can then get promoted to the next rank, our diesel costs would increase at that point but there is lots of places where we could cut back on if money became an issue. the baby savings in both my budgets are non negotable to us as we would prefer to have a seperate pot of money so that we are not having to pick a cheaper option over what we prefer just because we cant afford it.

hope this gives you a bit more information. we have overbudgetted in places for gas, electric, water, home insurance so that we know there is a bit of leeway in our figures based on what we pay now when we are renting.

thriftychap_2

Flightman wrote: »

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?

As a teacher you go up the pay scale each year. the same for a nurse. The pay freeze means that the scales are frozen but you still go up each year. You go up each year for 6 six years - MPS 1-6 you then apply to go onto the Upper pay scale UPS 1-3 which you go up once every 2 years. Im currently on MP5 5 and get a TLR (teaching & Learning Responsibility payment) as im a HOD. I hope to be part of an SLT (senior leadership team in 4 years which is on a leadership pay scale.

Hope this explains my circumstance - it was a very good point though, thank you.

getmore4less

thriftychap wrote: »

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.

This concerms me, the thinking seems to be a bit woolly.

15% in the first post was £36k so £11k more than the £25k then there are a costs and sounds like the wedding will not leave a lot left.

Talk of new year move or delay a bit is unrealistic , reality is that you are looking more like winter 2012/2013 with only a £1kpm savings plan.


I would do a detailed plan for the next 3 years.
Current SOA with real actual spendiing as if you did not move.
Extimated SOA based on moving and start to live on that.
(that will tell you the minimum savings you need to make),
extra cost items become part of the savings bringing the purchase date forward as saving grow.


Then look at the move and see what that will cost in capital outlay(deposits costs etc) and where in the next 3 years you can achieve the goal and actualy move without any extra debt other than the mortgage.

Adjust the budgets to hit a target date earlier if the current numbers don't work.

The key is living on the long term future costs now so you know you have them right when the time comes.

Also think carefully about the next highest cost item in most peoples finances, cars, these are money pits so reducing the dependacy on cars can be a significant saving long term.

You also need to consider property maintanence

getmore4less

thriftychap wrote: »

As a teacher you go up the pay scale each year. the same for a nurse. The pay freeze means that the scales are frozen but you still go up each year. You go up each year for 6 six years - MPS 1-6 you then apply to go onto the Upper pay scale UPS 1-3 which you go up once every 2 years. Im currently on MP5 5 and get a TLR (teaching & Learning Responsibility payment) as im a HOD. I hope to be part of an SLT (senior leadership team in 4 years which is on a leadership pay scale.

Hope this explains my circumstance - it was a very good point though, thank you.

Look very carefully at the places you work for career progressions, some hospitals are no longer promoting their nurses to the higher bands as fast as they used to so you get stuck or have to move.

Looking for a town with schools and hospitals close could reduce the dependancy on cars.

thriftychap_2

#15

seafarers_wife - Thanks for the reply. I think your budgeting for the child is a good idea, saving now is a good plan. Not something i had budgeted for.



Secondly - your post has also hit home we will probably want new furniture etc which is shown in your current payments.



Basically it looks like your extra 1k goes on furniture, pension and baby savings. We both have pensions as public sector workers (although the government want to reduce these - thats another thread)



You have given me food for thought. Thanks

thriftychap_2

#17

getmore4less - Thanks for the reply, some good points. I too am starting to think its a little unrealistic.



In response to some of your posts - i have calculated future outgoings etc compared to current and it all seems affordable but pretty tight, be it moving in 6 months or 3 three years (15% deposit and all costs paid so no new debt except bigger mortgage). As you have pointed out its long term unforseen costs/expereinces etc i was hoping to hear about from people who have been their done it and got the badge.



Thanks for the reply

thriftychap_2

GMS wrote: »

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

Hi again - once again I am not seeking approval. Im looking to be enlightened by expereinces that will endeavour to assist me in making a well informed decision. As a youngster I am not naive financially but know that people with more life experience than me will be able to offer some seeds of wisdom. If i can learn a lesson or two without making a mistake i would rather do that than fall flat on my face later because i was too arrogant or confident to ask advice.

Already I have been made aware of circumstances that i had overlooked.

I appreciate these responses very much.

Sorry for my previous reply - a little tempremental. I was not angered but frustrated, in no way am I seeking approval and being told I was from a financial adviser seemed a little ironic considering your job (is this what you tell clients seeking 'advice') Your responses are appreciated. Thank you.