95% newbuy mortgage

The_J

I'm going to buck the trend and instead of offering you life advice based on my own agenda I'm just going to answer the question.

Yes, this is achievable. Ideally you would reduce the credit cards down a bit.

squeeks

I imagine the underspend isn't really there.

The break down probably looks very similar to the following for the OP, excluding their other half and dividing a number of bills by 2.

net income:
2000-ish

outgoings:
£400 mortgage, building insurance, life insurance, contents insurance
£60 council tax
£80 utilities (water, gas and elec.)
£220 credit card interest
£110 joint loan repayment
£35 phone/bb/mobile etc..
£15 TV licence + TV package
Car finance/overdraft fees/insurance/fuel/car tax/MoT and other is probably another £180 at least.

So the free cash of 900 probably has to include food spend. So £150 a month less for that. Add a bit more for clothes, baby toys, dads toys, family outings, pot of paint to redo the spare room, the odd takeaway etc.. it soon disappears.

...
If 16% of their annual income is going into a retirement provision this would be an extra £310 a month, if using smart pensions, £433 without.
...

Open a spreadsheet and do an income vs expenditure analysis, make sure you include all your outgoings. A template can be found here: http://office.microsoft.com/en-us/templates/monthly-and-annual-income-and-expenses-planner-spreadsheet-TC030007789.aspx but there are many others.

libreoffice, openoffice.org are free to download if you need something to do a spreadsheet in.

shortchanged_2

squeeks wrote: »

I imagine the underspend isn't really there.

The break down probably looks very similar to the following for the OP, excluding their other half and dividing a number of bills by 2.

net income:
2000-ish

outgoings:
£400 mortgage, building insurance, life insurance, contents insurance
£60 council tax
£80 utilities (water, gas and elec.)
£220 credit card interest
£110 joint loan repayment
£35 phone/bb/mobile etc..
£15 TV licence + TV package
Car finance/overdraft fees/insurance/fuel/car tax/MoT and other is probably another £180 at least.

So the free cash of 900 probably has to include food spend. So £150 a month less for that. Add a bit more for clothes, baby toys, dads toys, family outings, pot of paint to redo the spare room, the odd takeaway etc.. it soon disappears.

...
If 16% of their annual income is going into a retirement provision this would be an extra £310 a month, if using smart pensions, £433 without.
...

Open a spreadsheet and do an income vs expenditure analysis, make sure you include all your outgoings. A template can be found here: http://office.microsoft.com/en-us/templates/monthly-and-annual-income-and-expenses-planner-spreadsheet-TC030007789.aspx but there are many others.

libreoffice, openoffice.org are free to download if you need something to do a spreadsheet in.

This is the feeling I have because I don't really understand why the OP is only paying off £220 a month off their CC if they have £900 a month 'spare' cash.

squeeks

The_J wrote: »

I'm going to buck the trend and instead of offering you life advice based on my own agenda I'm just going to answer the question.

Yes, this is achievable. Ideally you would reduce the credit cards down a bit.

Wow really, could you elaborate how it is possible please? As I've stated before I'm not a financial advisor, so would love to know.

The_J

Natwest will lend 194k in this situation (paying off the finance). Deduct the finance agreements (not sure what they are) and they should still lend enough.

shortchanged_2

The_J wrote: »

Natwest will lend 194k in this situation (paying off the finance). Deduct the finance agreements (not sure what they are) and they should still lend enough.

That's the point though isn't it The J. It's the debt and the level of it that the OP has that's the problem here.
3 times a joint income is OK if they had much lower debt levels. However in this case it is going to affect their affordability level for a mortgage of this size.

leveller2911

The_J wrote: »

Natwest will lend 194k in this situation (paying off the finance). Deduct the finance agreements (not sure what they are) and they should still lend enough.

Your sig says your an IFA and you do seem to have answered the specific question.However anyone with an ounce of common sense would read this thread and think the OP should sort out there finances/debts and go from there.

This is also a Forum and a place for debate so personal views/advice should be welcomed by anyone seeking advice or information. My question is don't you hear alarm bells ringing at all,considering the debts the OP has?

Its not a dig I'm just curious as to why you wouldn't give an opinion as with IFA they give opinions all the time on which product (in their opinion) is best .

squeeks

Just went through the natwest online thingy.

Again, stamp duty, solicitor fees, estate agent fees etc.. will need to be found. But providing you can sell for 125 - 130k it looks at least possible on paper that the bank will lend you more. If you sell for 120k or less i.e. have less than £9000 after the mortgage has been paid or you can't find the fees and duties, all bets are off.*

The 25 year mortgage looks to be £1000 per month repayment with interest rates around the 4.3 to 6% mark

Bear in mind that council tax and energy bills are likely to be higher in a bigger house as well. life/building Insurance premiums will also be higher, so free cash will be reduced.

Also get a mortgage in principle as soon as possible, just to make sure you can actually get the mortgage you want and we're not giving you a nudge in the wrong direction.

*While newbuy seems to allow 5% deposits I wasn't permitted to put in less than 10% though the online form, so this is something you'd have to clarify with the lender.

The_J

shortchanged wrote: »

That's the point though isn't it The J. It's the debt and the level of it that the OP has that's the problem here.
3 times a joint income is OK if they had much lower debt levels. However in this case it is going to affect their affordability level for a mortgage of this size.

194k was taking into consideration the loans and credit cards.

The_J

leveller2911 wrote: »

Your sig says your an IFA and you do seem to have answered the specific question.However anyone with an ounce of common sense would read this thread and think the OP should sort out there finances/debts and go from there.

If the debt is sustainable what is the problem with it?

You think the government should stop paying the public sector until the UK's debt is paid off? Maybe they should cut out one area of spending, like schools, or healthcare?

That is what you are potentially asking the OP to do. Stop living their life and pay off a debt first.

Debt is bad, it should be avoided, but it is often a means to an end.