Is this sensible or madness?

lazer

All,

I've put in an offer on a house which the vendors are considering

I just want to know if you think this is madness or not, I think I might just be getting scared of spending all the money!

Basically, I have enough saved for a 15% deposit, with no savings to spare apart from about £500 tops! (Parents helping me out with the fees only)
I have been saving at over £1k a month at the min so can hopefully get savings built up again quite quickly if i buy.

on a 15% mortgage my repayments would be just over £500, if i wne tdown to 10% and kept some savings, they would be over £600 a month.

I'm buying on my own, earning a decent salary

I'm reckoning total costs for running the house would be as follows

Mortgage 520
House Insurance 20
Rates (NI) 80
Oil 42
Electric 35
Phone/Broadband 26
TV Licence 13
TOTAL 732

Along with this I have car related expense of about £200 a month (including Petrol)

I earn £1.9k a month after tax

My aim would be to save £500 a month after buying to build up a decent emergency fund.

If something happened where i needed the money before such times as i get savings built up again - I could always sell my car and get around £4k i really necessary, or use my available credit (Credit cards, overdrafts etc) of around £10k - however i don't really want to get into more debt - the mortgage is enough, i usually save for what i want.

What do you think? - Is this sensible or should i use less of the savings and pay a higher monthly mortgage?
Originally - I was only aiming for the 10% but have just kept saving so its now at 15%.

Sorry for the long post - this FTB thing is just a bit daunting on my own.

BitterAndTwisted

An additional £1200 per annum over the the life of the mortgage is a MASSIVE sum. Why not put down enough as a deposit to leave you with a couple of grand set aside for contingencies until you can build up some more savings? You could always overpay on the mortgage later if you wanted to.

lazer

BitterAndTwisted wrote: »

An additional £1200 per annum over the the life of the mortgage is a MASSIVE sum. Why not put down enough as a deposit to leave you with a couple of grand set aside for contingencies until you can build up some more savings? You could always overpay on the mortgage later if you wanted to.

Simply, even if i kept a few grand as contigency, this would mean less than 15% deposit, so therefore not as good as rates, as they would be the 90% LTV products!
The repayments would only be £20 less than with the minimum 10% deposit.

I do want to have a mortgage that i can overpay, this is part of my long term plan!

Caveat_Mortgagor

You havent mentioned water rates / meter or insurances.

Also, to drive home the obvious, make sure you account for your food shopping.

Well done on saving your deposit. I would put down as much as possible if you think you can build those savings back up again. Just make sure you have totted every single minute expense when making your decision.

Good luck!

lazer

Caveat_Mortgagor wrote: »

You havent mentioned water rates / meter or insurances.

Also, to drive home the obvious, make sure you account for your food shopping.

Well done on saving your deposit. I would put down as much as possible if you think you can build those savings back up again. Just make sure you have totted every single minute expense when making your decision.

Good luck!

We don't have water rates in NI (yet anyway)
Food shopping - i usually manage on £100 - £120 a month

Thanks for the advice - I think i do intend to put as much down as possible - just getting very real now, so i'm having doubts!

hazyjo

How long's an average house purchase in NI? Around 3 months here. That might give you time to build up a few more savings. I'd definitely try for the 15%, especially in NI where the prices are around 50% lower than they were several years ago. The quicker you can eliminate that negative equity risk, the better position you're in.

I had a feeling you were in NI when I saw the 'oil' expense! Not something we have so much over here.

Jx

HAMISH_MCTAVISH

I'd check the utility bills again.

My electric bill is 5 times that. And I use twice in gas what you've budgeted for oil. When I was on oil in my last house, it was 3 times that.

Granted, I work from home a lot, have fairly big and old houses, use a lot of power for gadgets, live in a freezing part of the world and like to keep the house comfortable all year round.... but it still seems very low to me.

lazer

HAMISH_MCTAVISH wrote: »

I'd check the utility bills again.

My electric bill is 5 times that. And I use twice in gas what you've budgeted for oil. When I was on oil in my last house, it was 3 times that.

Granted, I work from home a lot, have fairly big and old houses, use a lot of power for gadgets, live in a freezing part of the world and like to keep the house comfortable all year round.... but it still seems very low to me.

Thanks for the advice!

The utility bills are based on my parents bills and my utility bills from my old flat.
I'd be confident that the electric bill would be about right, thats £100 a quarter and the parents bill is much less than that with 3 of us in the house.
You could be right about the oil, I'll increase the budget for this, its currently based on a full tank lasting the year, but as the house is bigger than my parents it could take more.

lazer

hazyjo wrote: »

How long's an average house purchase in NI? Around 3 months here. That might give you time to build up a few more savings. I'd definitely try for the 15%, especially in NI where the prices are around 50% lower than they were several years ago. The quicker you can eliminate that negative equity risk, the better position you're in.

I had a feeling you were in NI when I saw the 'oil' expense! Not something we have so much over here.

Jx

Estate agents/solicitors reckon the sale should procedd quite quickly, estimating 6 weeks.
So i do have time to get £1k extra savings.

Thanks

tyler80

I think your heating and electric bills look fine. We pay 25 for electric and 40 for gas per month averaged over the year without being particularly careful. Thats for an 1930s semi with rubbish windows, we paid about the same for a 3 bed modern detached.