Mortgage affordability

adele9365

Hi everyone.

My head is spinning looking at so many different mortgage rates and calculators and I was hoping for some advice by posting here.

Is a mortgage of 104k too much on a joint income of 34k? (18k and 16k respectively). We are looking at a £130k house with a 26k deposit.

How stretched are we likely to be? Should we set our sights lower? If I need to provide more info please let me know thanks. x

Thrugelmir

adele9365 wrote: »

How stretched are we likely to be?

Suggest you draw up an expenditure budget. Then you'll have an idea.

adele9365

Thanks I will do that. Is there somewhere here you can look at examples?

As a general rule is 3x your joint income the norm? I keep reading such conflicting info.

Thrugelmir

Here's an online one.

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

Be realistic with the spending ,holidays etc . Better to buy what you can comfortably afford and move up the ladder later on.

adele9365

Well I tried filling that in being as realistic as possible. In fact I was quite generous with everything because I would rather overbudget than be too tight.

Ended up with a £400 surplus. Which seems too good to be true.

I don't suppose a lot of our expenses would drastically change depending on the house we bought it would more or less just be the mortgage payments. How do I know how much is sensible on our wages?

curlygirl1971

adele9365 wrote: »

Thanks I will do that. Is there somewhere here you can look at examples?

As a general rule is 3x your joint income the norm? I keep reading such conflicting info.

I know that the Halifax has an online Mortgage calculator that will give you an idea of how much they would lend you based on your salaries - presumably other providers have the same on their websites. You could then use their other calculator to have a look at what your repayments might be like (ie £600 per month On a rate of 4.89%) and put that figure into your budget.

Thrugelmir

adele9365 wrote: »

I don't suppose a lot of our expenses would drastically change depending on the house we bought it would more or less just be the mortgage payments. How do I know how much is sensible on our wages?

Make allowance for interest rates being 2% to 3% higher than they are currently.

Remember also houses require maintenance, cars need replacing etc.

So being able to save for the longer term should be included in the budget if possible.

shortchanged_2

OP, do you have or are you planning on having children? Because that is when times get expensive.

Just something to consider.

The_J

If you are otherwise debt free that should be comfortably affordable.

adele9365

curlygirl1971 thankyou. I've looked at a load of 'How much can you borrow?' calculators and they vary massively from £80k to £160k. What I wish I had is a 'How much SHOULD you borrow?' calculator but then I guess that is a crystal ball everyone wishes they had.

Thrugelmir pop goes that £400 surplus then. A 3% interest rate rise would wipe out £200 and regular savings or a contingency fund would take care of the rest I guess.

shortchanged I would really like to think that we could start a family in the next 5 years, yes. How on earth do I budget for that now?

The J yes we are otherwise debtfree except for a student loan.

Gosh there is a lot to think about. x

michelle2008

I have done those SOa things. They always I say I should have hundreds left over every month - but even though I round everything up and fill out all the boxes - something always crops up and there goes the extra cash!!

Just make sure you don't over stretch - remember you will want to decorate and furnish the new house! That first year is way more expensive than I imagined!!

But good luck - I am sure you will make the right decision.