Would this be over stretching or safe enough?

Miss_Ratty

I think your budget sounds wise. One thing to double check though are the figures for council tax, water, fuel etc., if your place will be bigger. Firefox's suggestion of doing a statement of accounts/affairs is a good one, as we sometimes overlook things! Not that it will make that much difference compared to your overall income, but it's something we nearly forgot (council tax increase that is).

We're in the same boat, but we've offered 240k, and with equity, savings and a loan from the inlaws, we're looking at a mortgage of 189k, our combined wage is 60k, so less than yours. Plus we have no children at the moment. We have worked out that even if one of us should lose our jobs, it is still affordable, although the belts will be on the very last hole!

Well done for saving etc., and don't react to inflammatory comments on here! I was actually declared bankrupt in 2008 and am proud that I have got to where I am, and I realise now how difficult it can be to save, but it's to be applauded...so well done, and good luck!

mothershipton

I just wanted to say that yes your plans seem good, take no notice of the bitter people who are jealous of you. sounds like you have worked hard to save. We were not quite so brave when we purchase our first flat many years ago and should have bought a slightly dearer small house as we were then stuck when we had our unplanned first son. Took a while to sort out and I always wish Id been braver. Go for it!!

olly300

Miss_Ratty wrote: »

I was actually declared bankrupt in 2008 and am proud that I have got to where I am, and I realise now how difficult it can be to save, but it
's to be applauded...so well done, and good luck!

That's impressive to get here from where you were then.

I noticed you joined MSE in 2008 so you must have had your light bulb moment around then.

caeler

Bit of a thread hijack going on but back to OP. It sounds managable but you'll need to adjust. I mean you won't be able to save quite as much as you used to, which may initially feel disappointing. Also you might want to consider what will happen if you income has to dip again within the next 5 years (ie. another period of maternity leave) or if your wife decides not to return even part-time. Run all the scenarios so your prepared. Good luck!

cte1111

You need to make sure you include a realistic figure for childcare in your monthly figures. You and / or your wife might be able to do a salary sacrifice for childcare vouchers to save a bit each month on this.

I would also say that £970 for all bills, food, petrol etc seems a bit low. Have you included your car insurance, home insurance, car tax, breakdown cover, MOT and servicing? Even if you pay these annually, you need to budget for them monthly to ensure you put enough aside to pay these when they come up. Same for holidays, presents, haircuts and other beauty treatments, etc.

Just to compare, our house cost about the same as you are planning on paying and we have 2 children.

Our monthly household bills (inc mobile phones and life insurance) are about £410.
Car expenses (exc petrol), house insurance and Christmas spread over 12 months is £230 a month.
Petrol is about £200,
Groceries £220,
that adds up to £1060
without even adding on any other expenses (e.g. house repairs, meals out, take aways, going out, hair cuts, clothes, bits and pieces for the house, children's clubs, holidays, hobbies, window cleaner, toiletries and make up, think I should stop now as am depressing myself...)

If it were me, I would put as much as I can into the deposit, saving 25 year's interest seems like a good idea to me. Maybe keep a few thousand if you know you need to spend money on furniture / carpets etc, but even then I would try and get interest free credit for these and pay them back out of your monthly surplus.

Brinkster

Hi, thanks for the further advice. :beer:

The council tax will actually be cheaper than at our current rented place, so that will slightly offset the rise in mortgage cost against rent (houses about the same size, but rented one is a recent build so assessed completely differently!).

The childcare will be free (two sets of willing and available local grandparents).

The £970 a month does include all essential costs, like council tax, food shopping, insurance costs, TV, broadband, car MOT/service/repair allowance, etc (if paid annually I've divided back down by 12 to include in a monthly cost). However it does not include non-essentials like holidays, clothes, presents, etc. They would come out of the remainder.

I'm hoping roughly to have a 3-way split of 33.33% mortgage cost, 33.33% essential costs, and 33.33% left over for saving and spending on non-essentials. I realise with a baby we won't be able to save as hard as we used to though.

The point about further maternity leave is a good one, as that may be a short period of half a part time salary for my wife, depending on what she goes back on. We plan to have 1 more baby. We would need to just belt tighten for that period to avoid dipping into savings.

We are renting unfurnished and owned before, so we do have all furniture already. The place we are wanting to buy is ready to move into, so not much cost there, although no potential to add value either. We looked at doer-uppers, I loved the idea in theory, but the price difference to what we have found now didn't allow for very much value adding at all, especially with the hassle involved when doing it with a new baby.

evuliuxb

Weirdly, my name pops up to all the wrong quotes made by others, so seems like I'm the one who wrote about hand outs:D

Anyway, you should be fine, as long as you save every month, even if one of you loose the job, you should be able to cover the mortgage for a few months from your savings:beer:

Brinkster

evuliuxb wrote: »

Weirdly, my name pops up to all the wrong quotes made by others, so seems like I'm the one who wrote about hand outs:D

Anyway, you should be fine, as long as you save every month, even if one of you loose the job, you should be able to cover the mortgage for a few months from your savings:beer:

Thanks, I noticed that the quote notation got broken so you got misquoted several times.

seriousDFW

My goodness, that is a wonderful position to be in.

To answer your question, it doesn't sound anywhere near like you're overstretching yourselves.

I am very, very envious too! I worked the equivalent of a full time job through uni and still had a huge student loan and credit card debts. And I've earnt a decent wage ever since and am still in debt. I have been incredibly foolish with money - good on your for being more sensible!

nearlyrich

Whilst I think your situation is sustainable plan for worst case scenario, my parents looked after my children when I went back to work but my dad became ill and sadly died and my mum was ill a year or so later, but thankfully recovered enough to resume childcare duties, so I had a couple of periods where I had to find the cost of a child minder which was tough. As for the large mortgage when we bought this place almost 20 years ago we borrowed £60k and we both had sleepless nights thinking about how much we owed.

You sound sensible and you have thought it through I am sure you will be fine. And to the posters doubting your situation it is possible to live within your means and as savings build up they accelerate, imagine having the money you pay to the credit card every month as a positive balance !