Can we afford this house? Advice/opinions welcome

purply

We have seen a house for £109,950-lovely house-doesn't need anything doing to it.

Both me and my husband really want to put an offer in.

Issue is that our joint income is £26300 (i work part time). I should be earning more really (but thats another story) and will be in a few months.

Anyway, need some advice-can we afford this house? I have been looking at mortgages and it looks like we dont really qualify for the better deals as we only have 5K deposit.

BTW we are first time buyers.

momisa

Hi Purply
As you're asking the question I'm thinking you already know the answer!
However, to completely know whether you can afford the house sit down and work out;
how much the mortgage payment will be?
how much will the gas/electric be?
council tax?
workout all your other usual bills inc phone, TV, cable/Sky,food, social etc

Once you've done that you'll know whether you'd be stretching your finances.

Also consider the fact amongst many in the finance world that there is a going to be a predicted housing crash in a year or two. Point being, if you wait and save more towards a deposit you'll get a better deal.

Mr_helpful

you should just be able to get there if you have clean credit and no other loans.

Also consider the fact amongst many in the finance world that there is a going to be a predicted housing crash in a year or two. Point being, if you wait and save more towards a deposit you'll get a better deal.

yes thats been predicted by the press since 2001. One day they might be right.

MortgageMamma

PLenty of lenders will look at that

if you have tax credits you may well be able to include that as income with some lenders

Mr_helpful

If you dont get it now will you be able to afford it later? Probably not.

herbiesjp

Just over 4 times joint income can be done

The fact your income will be increasing soon will only help your scenario

But do you have any other debts in the background - loena/HP/credit cards/maintenance?

tweep

We had this discussion income simular to yours we have a mortgage in principle. We feel its now or never we held out hopeing for the market to change it didnt!
we have taken on 5x income the mortgage payments are easy affordable our one priority as long as we dont resist to temptation of other debts flash car etc we will be very stable.
Good luck

purply

thanks for the replies.

seen another property for 105k and is a bigger house with a bigger garden (im thinking conservatory??).

thinking of going for this one now.

btw, no loans, debts etc thank God!

After reading the housebuying forum, i think the best thing to do is buy a house, otherwise we will be waiting for years hoping that prices will decrease.

p

Curly_Girly_2

Purply, the best thing is to get a mortgage in principle so you know exactly how much money you have to play with and then look at houses in that price range. Having a mortgage in place will also help you when you go to put an offer in, as you'll be 'ready to go' from a seller's perspective.

If you've only been going by online calculators, do try ringing a few to see if you can be offered more.

Don't forget to put money aside for solicitors, surveys, moving, buildings insurance etc.

As Momisa says, do work out all the costs each month - you'll need life cover for the mortgage so this will be an additional cost you won't currently have etc

If you do find that the mortgage you need is coming out with monthly payments slightly higher than you can afford, then you could consider a split between interest-only and remortgage. We did this to start off - 60% repayment and 40% interest-only as we simply couldn't afford full repayment (we went for the highest split we could afford). The plan is to slowly increase the repayment % each time we remortgage so that we pay off more capital as our incomes increase - currently on 70/30 after 4 years!

herbiesjp

Have to agree with the above

Make sure you can get a mortgage in the first place, and then you can start putting in offers on the properties you like

Most lenders have on-line facilties for brokers to do this for you

HTH

purply

thanks again.
have been looking at lots and lots of mortgages-but i think i will need a mortgage broker!

i did want to go with A and L, but they will only let us borrow up to £95k, but i guess there is no harm in giving them a ring to see ifthey could offer more-they seem to have some good rates (not sure about their fees though!)

curly girly-re splitting payments-good idea!

what do you think about getting a loan to cover some of the deposit, so say i have a 10k deposit? bad idea?