Buyers: how far did you stretch your budget when buying home?

Dukesy

We could have spent about £140,000. We actually spent £95,000, and put 50% of our savings down as our deposit, which gave us an 85% mortgage. We didn't spend much buying the house, but we were buying to renovate which, of course, means further costs. When fully renovated though, we should achieve around £170,000.

sirmosh

We could afford about £300k, aimed to buy for £250k but ended up spending just over £180k. In short we were massively below what we could comfortably afford and as a result live a pretty stress free life financially speaking.

Why did we go so far under? Basically we found a house we loved but it was right in town centre which lowered the price a lot and wasn't as big as others we had seen either.

HappySeagull

Surely this depends on whether the house value is more likely to go up than down? I don't like to view it as an investment - it's a home - but I'd be more inclined to stretch myself at the moment.

MaxTheCat

sterl1ng wrote: »

Although I can borrow more from lender I don't want to go max which would make it around 210 I could get a place for. I've told myself to go no higher than 190 on a place, especially as rates are low (getting a 85% LTV) and could change anytime but then it leaves me with not as much choice in 2 bed properties I want in the croydon (east/south) areas which would be ground and garden.

I wondered if anyone is playing it safe like me and thus waiting longer for the perfect place OR are they going with max the bank will lend them plus their 10% or 15% deposit?

I have a >300k deposit and am borrowing 150k. The bank is willing to lend me 400k so basically I'm really not stretching myself at all. I intend to pay it off over the next 5 years.

Kynthia

It's ridiculous the amount the banks will lend us due to our two salaries and decent deposit. We couldn't afford the repayments which is silly. Therefore we are considering borrowing a lot less as we want a life. We are also taking into account not just what repayments we can comfortably afford now, but what we can afford short term if one of us loses our job, or if we have a child and go part time, or if interest rates increase. However it's hard because I want the best house we can get too.

Jaybo10

japmis wrote: »

I was restricted by my 10% deposit rather than my salary.

When working out how much you can afford, your mortgage payment shouldn't be more than 1/3 of your take home pay e.g. if your take home pay after tax is £1500, then your mortgage payments shouldn't be more than £500.

Hope this helps.

We are going for up to 44% of our take home, but we have quite a high household income and my job (main earner) is a pretty secure one. We've calculated we can cope at 12% interest rates (living on beans) and while interest rates are as low as they are now we will over pay.

Old_Git

I pay £27.99 on a interest only mortgage of £49.000.I can afford it.

beachie

When I first bought my flat I was on £17'995, had no deposit and borrowed £97k (5.5 times my income). This was high but I was fine and covered the payments quite comfortably.

I know have 83k outstanding which is now only 3.1 times my income.

I am going to purchase a new place soon but will be stretching myself a bit because I want to get two decent sized bedrooms so I can rent one out. Probably cost around £150k, but I will probably be paying about the same as I am now because of the rental income.

bodmil

I played it safe and negotiated the price to make sure I kept 15k back. I was very glad I did as my boiler turned out to be broken, the electrics woefully out of date and company went bankrupt a few months later.

thedalmeny

Jaybo10 wrote: »

We are going for up to 44% of our take home, but we have quite a high household income and my job (main earner) is a pretty secure one. We've calculated we can cope at 12% interest rates (living on beans) and while interest rates are as low as they are now we will over pay.

44%, crikey.

You know i do feel for people who live / work in London, how on earth they can expect to get a decent family home without stretching themselves i've no idea.

If you live to far out, you're subject to eye watering transport costs.

If you live to far in, you're subject to incredible high prices which more often than not requires some form of sacrifice.

So very glad i live and work in the North West.