Can I afford a house

sazz_1984

Hi,

I am looking to buy my first house on my own and am after some advise.

I earn £1300 a month on average and am looking to spend no more than 70k on a 2 bed terrace. I have a 10% deposit to put down.

I do not have any debt other than my car finance which is £200 a month.

Do you think I can comfortably afford the house an have money left over for a life?

Any help would be very much appreciated

[Deleted User]

Try and work it out by working backwards.

fill in an SOA as it would be for the sort of place that you would buy. Include everything.

What your mortgage payment would be, your Ctax (you'd get 25% discount if living alone), gas, electric, phone, internet, buildings and contents insurance, water, all your car expenses (car insurance, car tax, petrol, MOT, maintenance etc), your food expenses, any expenses for hobbies and/or general living (going out meeting with friends etc), mobile phone, clothes etc

Some kind of emergency savings in case something breaks down/needs repaired etc.

Maybe try filling in the Statement of Affairs calculator and seeing how it works out:

http://www.makesenseofcards.com/

HTH,

D9

Fire_Fox

Welcome! Complete one of these in full for your own benefit, or post the results for comments. http://www.stoozing.com/msoc/soacalc.php
Also read http://www.moneysavingexpert.com/savings/pay-off-debts

Many lenders take your gross deposit and subtract your debts to get the net, so you may find some/ all deem you to have little or no deposit. Do you also have money set aside for survey, mortgage application, legals, three months mortgage payments in case you suddenly end up unable to work, removals, furniture, initial decorating and repairs?

sazz_1984

Yeah I do have enough money put away for those things and I already have all of my furniture in storage from when I previously rented with an ex partner.

I have plenty of money to get myself started, but I don't want to eat into my savings each month as that is for emergencies.

As I have no debt and an excellent credit rating, I can't see the mortgage being a problem.

Annisele

It's possible that the mortgage *might* be a problem.

You say you earn £1300 a month on average - which suggests that some of your earnings might be overtime/commission/otherwise not guaranteed. Some lenders won't take all of your non-basic pay into account.

Plus, if the £1300 is before tax, that makes £15,600 per year. A mortgage of £63k would mean you're looking at a touch over 4x salary - which is pushing things from a lender's perspective even without taking the car finance into account.

Fire_Fox

sazz_1984 wrote: »

Yeah I do have enough money put away for those things and I already have all of my furniture in storage from when I previously rented with an ex partner.

I have plenty of money to get myself started, but I don't want to eat into my savings each month as that is for emergencies.

As I have no debt and an excellent credit rating, I can't see the mortgage being a problem.

You do have debt, you have car finance! Are you registered to vote? Small thing but helps your credit rating.

thelem

When filling in an SOA, try to do as much as possible based on your recent bank statements, rather than estimating off the top of your head. It can be surprising how quickly things can add up.

kingstreet

Annisele wrote: »

You say you earn £1300 a month on average - which suggests that some of your earnings might be overtime/commission/otherwise not guaranteed. Some lenders won't take all of your non-basic pay into account.

Plus, if the £1300 is before tax, that makes £15,600 per year. A mortgage of £63k would mean you're looking at a touch over 4x salary - which is pushing things from a lender's perspective even without taking the car finance into account.

Yep. And the car finance is going to take around £10k off that borrowing power if it's got more than six months left to run.