£4,200 net income per month and can't get a mortgage!

Thrugelmir

mildred1978 wrote: »

I like to spread the risk. I have 15 years in a frozen civil service pension which will pay out when I'm 60, I'll continue paying into a private pension through my company to reduce tax liability, and maintain (hopefully) a few hundred £k in liquid assets (offsetting and in high rate savings accounts and ISAs) just in case.

Then you'll have far more than the average retiree and will be very well off compared to the majority.

mildred1978

Thrugelmir wrote: »

Then you'll have far more than the average retiree and will be very well off compared to the majority.

That's the plan. :beer:

LittleMissAspie

The_J wrote: »

Paying a mortgage off in 5-10 years is very easy if you are motivated to do so.

You seem to veer dramatically between saying very sensible things and very silly things. It's not easy to pay off a mortgage that quickly. My aim is 6-7 years from start of mortgage, we borrowed 2x joint earnings (peanuts compared to some!!) and have no children or loans or financial commitments and I'm very motivated to pay it off, but it's not easy. I am queen of budgeting and you have to be consistently strict and disciplined on every penny you spend for years and years. It really isn't easy.

On the subject of mortgage length, I remember reading a thread here about a couple who'd taken out a small 5 year mortgage then got into some financial trouble and were under threat of being repossessed. If they'd taken the mortgage over 10 years they would have been able to afford it but the bank wouldn't let them extend the term. So I think a longer term is prudent as long as you overpay.

The_J

mildred1978 wrote: »

Utter carp.

It's a gamble. You could die the day after you retire. You could live to be 110. In reality something in between is likely, but how close to either end can't be predicted. Similarly you could be maimed at 35, and if all your spare cash went into a pension you'd be screwed for at least 25 years.

I'm talking about the average, clearly.

LittleMissAspie wrote: »

You seem to veer dramatically between saying very sensible things and very silly things. It's not easy to pay off a mortgage that quickly. My aim is 6-7 years from start of mortgage, we borrowed 2x joint earnings (peanuts compared to some!!) and have no children or loans or financial commitments and I'm very motivated to pay it off, but it's not easy. I am queen of budgeting and you have to be consistently strict and disciplined on every penny you spend for years and years. It really isn't easy.

On the subject of mortgage length, I remember reading a thread here about a couple who'd taken out a small 5 year mortgage then got into some financial trouble and were under threat of being repossessed. If they'd taken the mortgage over 10 years they would have been able to afford it but the bank wouldn't let them extend the term. So I think a longer term is prudent as long as you overpay.

When do I say sensible things? Maybe "very easy" was the wrong terminology, but living costs are not expensive. I hate people who complain about being poor but pay £100 a month for gas, £100 for electricity, £70 for Sky, £40 mobile contract etc. etc. All of that is completely unnecessary and actually quite offensive. If not having Sky is "being disciplined" then god help the world.

Bills £300 a month
Food £200 a month (this would feed a family for 4 easily, and you would eat like a king, if you disagree learn to cook)
Petrol £150 a month
Total = £650

Two people on 50k joint - Take home £3250 a month
Mortgage 100k

Repay £100k mortgage over 5 years requires £1850 a month leaving £750 a month to play with.

Two people on 100k joint - Take home £6000 a month
Mortgage 200k
Required 5 year payment £3650 a month leaving £1700 a month to play with (house likely worth more but easily enough to accomodate higher council tax and marginally higher heating costs).

Thrugelmir

The_J wrote: »

Bills £300 a month
Food £200 a month (this would feed a family for 4 easily, and you would eat like a king, if you disagree learn to cook)
Petrol £150 a month
Total = £650

Seems on the light side for the average home.

Do you repair, insure, tax your car? Any plans to replace it in the future?

Thrugelmir

The_J wrote: »

Two people on 50k joint - Take home £3250 a month
Mortgage 100k

Repay £100k mortgage over 5 years requires £1850 a month leaving £750 a month to play with.

The average UK mortgage is £130k. To repay over 5 years at 5% would cost over £2,450.

The incomes you quote aren't average, They are above the majority.

The_J

I was basing it on 2x income for the previous poster....

Depends on how far you live from work, kids schools etc. of course but it shouldn't be a whole lot more. I walk/cycle/run so I spend very little on petrol.

Bills
Council tax - £100 (average home)
Gas - £30
Electric - £30
Water - £30
Phone - £20
House insurance - £15
Mobile - £40 (2 phones)
Car insurance & tax £40

About £300.

£750 a month saving will buy a new car at least every year but I am of course assuming someone would own their car outright from the start.

The_J

Thrugelmir wrote: »

The average UK mortgage is £130k. To repay over 5 years at 5% would cost over £2,450.

The incomes you quote aren't average, They are above the majority.

At 4x income you are talking about a 10 year plan.

£1400 a month mortgage. Takehome pay £2260.

Leaving £860 for bills a month. Easy peasy.

Thrugelmir

The_J wrote: »

I was basing it on 2x income for the previous poster....

I recommend this tool as a way of arriving at a true figure.

http://www.makesenseofcards.com/soacalc.html

The_J

Thrugelmir wrote: »

I recommend this tool as a way of arriving at a true figure.

http://www.makesenseofcards.com/soacalc.html

I've put down a true figure that most people can easily reach if they are motivated to do so. I am not saying that everyone should do it, some people like Sky, some people like to keep their house at a steady 23C but as long as those people never whinge about money then I'm happy.