How much it too much ?

HappiiPill

Just as question as a first time buyer.
My partner and are looking to get onto the property ladder, we have original looked at houses for about 170,000-180,000 but we have now decided we like the look of a few new builds around our area and think thats the direction we are going.
The new builds we have seen are about 215,000-235,000. We have the money to put down for that type of mortgage but what would the average repayment cost be on those larger type of mortgages ? Also are we thinking a bit big for our first home and should work our way up or is it okay to look if you can afford ?
Thanks guys x

HappyMJ

HappiiPill wrote: »

Just as question as a first time buyer.
My partner and are looking to get onto the property ladder, we have original looked at houses for about 170,000-180,000 but we have now decided we like the look of a few new builds around our area and think thats the direction we are going.
The new builds we have seen are about 215,000-235,000. We have the money to put down for that type of mortgage but what would the average repayment cost be on those larger type of mortgages ? Also are we thinking a bit big for our first home and should work our way up or is it okay to look if you can afford ?
Thanks guys x

My personal opinion......is to spend as much as you can stretching yourself as much as possible getting the best property you can get and then do not move again for many many years. So if you have just got together with someone just rent a little one bed flat and save like anything and buy a 3/4 bedroom home to live in forever once you have enough deposit. Selling a small property and then buying a little bigger each time costs a lot of money and it is in my opinion it's very stressful selling a property. The costs of renting aren't that high compared to the costs of short term ownership of a small property and you only need give 1 months notice to leave.

edit: New builds will intially depreciate as opposed to older houses but if you live in it for 20 years or so then it doesn't matter.

Goldiegirl

I think there's online mortgage calculators to give and idea of what is affordable on your salary and what the monthly payments would be.

I've only bought a house twice in my life, in 1981 and 1989.

Each time I've gone to the top end of what is affordable, because I wanted my house to be a long term home, so I wanted to be completely happy with it, and not feel dissatisfied with it after a few months, wishing I'd pushed myself more to get the home I really wanted.

If you can afford a property you can buy it whether it's your 1st or 10th home.

There's no set rule that FTB's have to buy 'starter' homes. Buy what you want and will be happy to live in, within affordability of course.

StuC75

All depends on Loan to Value rate - at 180k you may be able to put down a bigger deposit and so get a better rate.. at £220k that same money makes up a lower % and so may not get as good a rate on the mortgage.

consider aspects beyond just the mortgage amount - new developments carry a premium (like new cars) and in terms of future re-sale you may lose a bit of that equity when reselling.. so proceed with care.. in the most basic terms 235k vs 180k mortgage is going to cost you 30% more; assuming you know what the mortgage would be on 180k right?

HappiiPill

Thank you. We have been living and renting together for 3 years now and we have 50,000 pound saved up for a deposit.

I have also just used the mortgage calculator and it says based on our annual income without bonuses we will get 244,000-300,000 and with it was up to 400,000

I have just been speaking to a lot of people i work with and because i am still young they think its silly that i want to start big and have a mortgage for the next 25 years but i see it as the soon the better as it means i can have more fun when I'm older and have a house maybe thats just me...

Goldiegirl

HappiiPill wrote: »

Thank you. We have been living and renting together for 3 years now and we have 50,000 pound saved up for a deposit.

I have also just used the mortgage calculator and it says based on our annual income without bonuses we will get 244,000-300,000 and with it was up to 400,000

I have just been speaking to a lot of people i work with and because i am still young they think its silly that i want to start big and have a mortgage for the next 25 years but i see it as the soon the better as it means i can have more fun when I'm older and have a house maybe thats just me...

Not just you, I've got the house that I love, no mortgage and loads of cruise holidays- I'm older, early 50's, but not THAT old, and I feel that by pushing myself when I was younger, it's helped me get into a comfortable position now

HappyMJ

HappiiPill wrote: »

Thank you. We have been living and renting together for 3 years now and we have 50,000 pound saved up for a deposit.

I have also just used the mortgage calculator and it says based on our annual income without bonuses we will get 244,000-300,000 and with it was up to 400,000

I have just been speaking to a lot of people i work with and because i am still young they think its silly that i want to start big and have a mortgage for the next 25 years but i see it as the soon the better as it means i can have more fun when I'm older and have a house maybe thats just me...

If you have £50,000 and borrow £150,000 you will get some very attractive low rates of interest due your loan to value ratio being less than 75%. If you borrowed £200,000 you will still get some good rates as your LTV would be 80%. I'm not sure how long it's taken you to save up £50,000. If you can continue to keep your expenses low you could have a large mortgage paid off in no time. It doesn't have to be 25 years. You can make overpayments and pay it off in 15 years.

Idiophreak

Say you put down 10% deposit on a 235 place (23.5k) - you'd be on 90% ltv and rates start from 4.7% if you want to fix for 5 years - monthly payment of £1180 (assuming 25 year term).

If you put down 15% on a 170 place (2k more), you'd be on 85% ltv, you could get a 4.3% rate, £740, something like that per month.

If you overpaid up to the larger payment (ie an extra 440/month) you could knock something like 12 years off your mortgage term.

Or you could save the money and go on a 5k holiday each summer, buy a pony or anything else you'd rather do with your money. Pay your money, take your choice and all that...But overall you'll always pay less buying a smaller place on lower LTV...

eta: sorry, X posted - not really relevant...but principal's the same

StuC75

You do need consider how circumstances may change over time - consider what may happen if you have children - and so a drop in earnings for a period of time; what if redundancies etc.. Just because you may be able to go 'upto' xxx amount.. it doesnt mean that you have; keep a healthy buffer on the work \ life balance.. Keep the bonus as that, something to do something with and not dependent upon for mortgage purposes..

In my case were planning a family so kept the mortgage affordable for one.. which was kind of handy when we broke up and I knew that I could take the mortgage on myself and not be forced to sell up..