Realistic chance?

Penumbra

My wife and I bought our house during November 2008 for £105,000 and took out a mortgage of £100,000. We will have £93,000 left to pay by November this year and we're currently on a 5yr fixed that expires 2015.

At the time we took out the mortgage both of us worked but since then we have had our first child and my wife is a stay-at-home Mom, reducing us to a single salary household (basically we worked out we save money each month if she gave up her job due to her transport costs combined with childcare). I earn £30,000 a year basic plus between £400 and £600 a month regular overtime. In all honesty my net salary is pretty much the same as our monthly outgoings, in large part due to a) our mortgage repayment - rates were high on fixed rate mortgages with 95% LTV when we took out our mortgage, b) grocery and energy bills and c) petrol. I have a long commute to work and spend about £300 a month on petrol.

We're looking to move closer to my employer as we a) will save considerably on petrol - almost £200 a month and b) my employer has offered us a cash gift of £2000 to help with moving costs. A lot of homes we have been looking at are in the £125,000 - £130,000 bracket but I have no idea if this is a realistic possibility. We're due to get our home valued in the coming weeks but I wanted to get an idea from people in the know as to the likelihood of us being able to achieve what we want to do.

At a guess, combining equity, savings and the cash gift and removing the typical costs of moving we'd have about £11,000 -£13,000 deposit. Whether we port our current mortgage or take out a new one I'm not terribly fussed but do you educated folk think we'd be likely to be offered a new deal based on the figures above and, also, whether we could realistically look to buy in the £125,000-£130,000 area? Be blunt with me if needed!

We do intend to sit down with a mortgage/financial advisor once our home has been valued but I'm trying to gauge whether our plan is viable or not first.

I'm sincerely grateful for any and all advice.

ACG

You will really need a 10% deposit now.
It is possible with less than 10% but its very difficult.

In theory your plan is possible, your income should be just about ok. But i think it is worth sitting ddown with a broker like you say to see if it is possible.

Penumbra

Many thanks for your reply. I had a feeling we were borderline but we'll try all the same.

Thrugelmir

Have you made allowance for all the costs of selling and buying in your calculations?

Penumbra

We have, yep.

We'll be aiming below the Stamp Duty threshold (i.e we'll try to get, say, a £130,000 for below the £125,000 limit) so that is one less thing to worry about. I don't yet fully grasp what the approximate Estate Agent fees might be, though, so I've had to make an educated guess. I do have a reasonable idea of solicitor fees and costs of moving, surveys etc though.

I'm expecting it all to be very tight though!