What percentage of your income was on monthly mortgage (FTBs)?

AlexMac

You're being terrifyingly rational about your options and priorities, so I think you'll be fine; I disagree with the idea above that you should buy a cheaper property, and suggest that instead, you push your purchase budget (and hence, repayments) as far as you feel you can afford.

Despite the fact that house price inflation has slowed (in some areas to a standstill) and the fact that the taxman will screw you for a one-off SDLT of over £10k on your purchase, your home's still probably the best investment you'll ever make, so you might as well buy a decent place now and tighten your belts a bit, rather than bung the taxman another ten grand by trading up in a few years. And desirable areas in the SE are probably one of the safer bets in your price -range even if everything goes t*ts-up and you have to sell unexpectedly; for any unforseen reason.

... Always assuming the quote in your last post that you aim to "live somewhere we feel happy and can raise a family" is a medium-term plan and won't leave you feeling financially trapped and broody in the next couple of years? And that you feel reasonably confident about job-security too in the immediate future. Best wishes!

khgibb

AlexMac wrote: »

... Always assuming the quote in your last post that you aim to "live somewhere we feel happy and can raise a family" is a medium-term plan and won't leave you feeling financially trapped and broody in the next couple of years? And that you feel reasonably confident about job-security too in the immediate future. Best wishes!

You're right that the house prices in the south east round our county have barely changed much since the financial crisis hit, they are just increasing only a tiny bit now instead of leaping up. The tough bit is working out what is sensible/can afford!

And the starting a family we would hope to do in the next 2-3 years, but you never know if it is possible until you try! We can afford a house in the region until we have a family, then things are likely to be a really tight unless I'm working part-time. But we would like to invest in a house where we would stay for 15 years or so (unless job/circumstances forced a change) so we don't end up wasting thousands on fees, taxes and moving costs after buying a smaller place and then having to move again after only a few years. But of course who knows what the future will bring, so even the best laid plans are likely to need revising!

lee111s

Mine is 31%

Sally22_2

If we get the place that we are proceeding with (as FTB as well) then it will be 31% for us as well

Angie_B

As a FTB, my mortgage is 38% of my take-home pay.

I think you need to look at more than just percentage though, for example 30% of a £25k salary is going to leave you with a lot less than 30% of a £50k salary.

I think you need to look at your mortgage payments, bills and outgoings and compare them to your OH's take-home pay plus typical benefits you would be entitled to. That is the only way you are going to be able to tell if you can cope on one salary or not.

motherofstudents

I would make overpayments to your mortgage while you can then if there is only one of you working, you can revert back to the minimum payment for a while. I think when we were first time buyers our mortgage was about 30%. Now it is still about 30% plus an overpayment which makes it about 55%. It is hard but we want to pay the mortgage off in a couple of years.

Tancred

khgibb wrote: »

Interested to know what you guys think would be a sensible max for percentage of income to go out on your mortgage when you first buy a house?

I'm stressing a bit about what might happen if we start a family in the next few years and I'm not able to return to work (due to possible health complications we already know about). That would mean we'd need to cope on just one salary.

My husband and have been very lucky and through saving and family help have saved £140k. Figuring on 20k for fees, we have a deposit of 120k. We live in the south east where houses are stupidly expensive, and over the past 8 months of looking we've come to terms with the fact that a typical 3 bed terraced or semi goes for 370-400k at the bottom end. At the moment this would mean around a 70% LTV ratio and borrowing around 3 times our combined salaries (which total together around 90k gross annually). That would be fine now as our rent is approx the same that the mortgage payments would be, but I worry about how we'd cope if our circumstances change in the next few years.

Any thoughts?

Around £370-400k at the bottom end?!! Nonsense. Where are you looking? Henley-on-Thames, Marlow? I can find several 4 bedroom houses in Wokingham for £325k, some detached and in decent areas. In Reading you can easily get a 4 bed semi for £300k and 3 bed semi for £250-280k.

Interest rates are lower than ever and can only go one way - up! My advice would be not to go for anything above £375k maximum on a 25 year mortgage. Obviously less if you are seeking a 20 year deal etc (not sure how old you are).

Tancred

motherofstudents wrote: »

I would make overpayments to your mortgage while you can then if there is only one of you working, you can revert back to the minimum payment for a while. I think when we were first time buyers our mortgage was about 30%. Now it is still about 30% plus an overpayment which makes it about 55%. It is hard but we want to pay the mortgage off in a couple of years.

It's a risky strategy. Paying a mortgage isn't some kind of a race; it's a debt but a very long term one that can be managed. We currently pay 13% of our net income towards the mortgage and spare cash goes into ISAs, long term bonds etc. With our bigger new house we will pay around 18.5% on the mortgage and even at that level it will hurt, especially given the extra £470 a year to pay for the move from a band C house to a band E one. If we paid 55% of net pay towards the mortgage we'd starve! :eek:

Tancred

AlexMac wrote: »

You're being terrifyingly rational about your options and priorities, so I think you'll be fine; I disagree with the idea above that you should buy a cheaper property, and suggest that instead, you push your purchase budget (and hence, repayments) as far as you feel you can afford.

Despite the fact that house price inflation has slowed (in some areas to a standstill) and the fact that the taxman will screw you for a one-off SDLT of over £10k on your purchase, your home's still probably the best investment you'll ever make, so you might as well buy a decent place now and tighten your belts a bit, rather than bung the taxman another ten grand by trading up in a few years. And desirable areas in the SE are probably one of the safer bets in your price -range even if everything goes t*ts-up and you have to sell unexpectedly; for any unforseen reason.

... Always assuming the quote in your last post that you aim to "live somewhere we feel happy and can raise a family" is a medium-term plan and won't leave you feeling financially trapped and broody in the next couple of years? And that you feel reasonably confident about job-security too in the immediate future. Best wishes!

A house is a home, not an investment! I'm well and truly fed up of hearing a house treated as an investment - it isn't. It's a pile of bricks and mortar that shelters you and provides you with living space - no more. Too many people stretch themselves and then end up flat on their faces when they lose their jobs and can't afford to pay the mortgage. You should buy a house that you need, not one that you dream of. In the long term house prices lag behind shares historically, so even if you look at property as an investment it's not the best. Maybe London properties in certain areas are a good investment, but that's only because the London market is international.

Wait until interest rates go up - as they will, due to inevitable inflationary pressures - and you'll see the market collapse and people who overstretched themselves go under. It won't be pretty. Maybe London properties in certain areas are a good investment, but that's only because the London market is international.

Tancred

khgibb wrote: »

Thanks, but that wasn't my question. Sadly there is no way we could find anything reasonable for that cost in a location that would allow us to both work in our chosen careers. And we'd rather enjoy our jobs and live somewhere we feel happy and can raise a family.

Have you not heard of commuting?