first time buyer advice please

t3rm3y

my partner and myself are looking at getting a home together.
our combined wages are only £27,000 but i rang our bank to see what we could get, they said £115,000 and this would be over 28 years and cost £707 per month - i dont think i can afford £707 per mth on my wages with other bills.
my questions are:
1) £707 x 12 x 28 equals £238k - double the loan amount - is this normal??? surely not.

2) is there a calculator or some advice on average bill spend for everything else we would need to pay per month? (gas, electric, water, council tax, tv licence, etc)

bluebird

Gather all your bills write down how much you are spending on gas/electric/water/council tax/etc...this way you can see how much you need to live on.be honest and figure food bills car fuel everything you can possibly think of,then and only then can you see what it cost both of you.Now have either of you thought about second jobs? the income you have is somewhat low and i can see £707 a month mortgage is rather high and god forbid they increase as they often do.
Have you any savings? i hope so else you may struggle with the calculations above.

t3rm3y

we have savings. house we did look at was £130k, we have £15k deposit. and then another £5 to do house up (there is no central heating, so that is something we would install). but then our savings would be gone so if either of us lost a job we would be stuffed....
my partner is working part time as she is also a mum.
i am on low wages and am looking for more work but it is difficult at the moment.
we currently live with my partners dad so i will see if she can speak to him about getting all the bill info, (hopefully he wont mind)

Idiophreak

If you look on the debt free wannabe board, you can find loads of example SOAs on there which will give you an idea of what people typically spend on each thing per month.

What kind of property are you after?

As a rough guide, we pay (2 people, new build 2 bed flat):
£60 gas/electric per month
£130 water per 6 months
£113 council tax - 10 months in 12
£12.50 TV licence
£400/6 months service charge
£100/year contents (with a few named items)
£10/month boiler cover
£15/month phone
£11/month broadband
...

Idiophreak

t3rm3y wrote: »

we have savings. house we did look at was £130k, we have £15k deposit. and then another £5 to do house up (there is no central heating, so that is something we would install). but then our savings would be gone so if either of us lost a job we would be stuffed....

Don't forget the cost of moving, too. Between mortgage fees, solicitors fees, moving costs, surveys etc you can easily find that 3-5k disappears...

LeafGreen

In answer to your first question, yes it is quite likely that over the entire term of the mortgage you will pay back double the original amount. That sounds a lot, and it is, but remember to factor inflation into the mix - £100 should be easier to find in 25 years than it is today.

The Interest Rate - around 5.9% - is quite high by today's standards, so it is possible you may be able to shop around a little, although even with 10% deposit after legal and doing up costs that may be easier said than done.

Remember that in general, interest rates are low and could well rise in the medium term future if not before (nobody knows). If that 5.9% was 8% for example, your repayments would be more like £867. Not trying to put you off but it is very sensible to be aware of these things and be prepared.

One final point - does the bank know that the house you have seen does not have central heating? They will need to be aware and this is something that can affect a mortgage offer.

Good luck :-)

t3rm3y

no, i didnt tell them, and didnt realise i needed to. i better tell them though, no point paying for a survey for them to say they wont give the mortgage or a survey refund

LeafGreen

I don't work in the industry and am far from an expert, but I think it was this thread that I had in mind - worth a quick read...
https://forums.moneysavingexpert.com/discussion/3716547