ftb too big too soon?

nothomealone

looking at buying a four bed new build as no 3 beds available within foreseeable future and we hope to start a family soon.


house cost £200k
help to buy 40k
deposit 25k
builder gift 6k


remaining mortgage 129k


mortgage and bills all in are 2k a month we would look to put £1300 in each a month leaving us £600ish a overpay/save


additional info


28/27 years old
earning 30k and 26k
would have 10k left in savings after deposit and 5k spent on furniture
we would have atleast an additional £300 a month each for leisure.
mortgage would be 5 year fix costing 615 a month would like to pay £300 a month overpayments


all opinions welcome

leveller2911

If your planning on starting a family soon you may well be one income down or at the very least expensive childcare costs.. Some couples prefer one parent to stay at home until the new arrival starts school/nursery. Council tax will be more on a 4 bedroom, cost of heating increases etc etc.

Children are expensive and when you have one how long before a 2nd comes along. Beware of people saying "little Annie needs a sister/brother".

£5k to furnish including nursery etc is way short in my opinion. Don't forget HTB will need to be paid back. I'm risk adverse and think your pushing the limits and personally I would have 12 months mortgage payments put aside for a rainy day fund.

beachie

leveller2911 wrote: »

£5k to furnish including nursery etc is way short in my opinion.

£5k sounds alot to me! All comes down to how much you want to spend I guess. I completely furnished my flat over a few months with free or cheap furniture. My bed frame was free, my cupboards are from Ikea and my kitchen utensils were mainly from friends and family. I had a dining room set that was originally my grandparents. My dad managed to get some rather nice cheap material from work and we repainted and reupholstered them.

My biggest buy was my sofabed at £300 (marked down from £900). All in I estimate I furnished the whole flat for about £500.

Buying old, worn furniture and giving it a paint is a cheap way to furnish a home. It's often much better made than the new stuff to.

Kynthia

Are the buying costs and stamp duty accounted for?

Thrugelmir

Could you live on one salary?

dgtazzman

I really don't want to sound negative, but have you talked to an IFA about this yet?

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house cost £200k
help to buy 40k
deposit 25k
builder gift 6k

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If you are putting down 25k yourselves, you won't get 40k from the HTB scheme, they will only contribute that much on the scheme if you put down the minimum 5%, being 10k, yourselves. The scheme will only bring the total deposit up to 25% of the purchase price and I believe they will only contribute 10% or 20%, depending on your own deposit you have available.

You could opt just to put the 10k towards the deposit and use the rest of the 25k you have for furnishing/overpaying the mortgage, or you would have to add another 5k to your own deposit to bring it up to 30k, at which point the HTB scheme would contribute 10% of the purchase price, 20k, to bring the total deposit up to 25%.

Also the builder gift of 6k could be a stumbling block. Some HTB administrators won't allow cash incentives, others have limits on them. Also, quite a few lenders have limits on how much cash incentive they will accept when considering the mortgage, at the very least it will have an influence on the valuation of the property. Non-cash incentives (upgrades etc.) are easier to get away with. I would check this very carefully before applying somewhere for a mortgage.

2k a month for 2 people with a mortgage of £615 a month also seems quite high...

pinkteapot

Bills £2k per month? Seems really high... What's the breakdown of that?

nothomealone

Ive incorrectly worded alot of my op due to rushing it to clarify.


Finace- we currently take home 4k combined (we will take it has we take home 3k combined as my wage will decrease in next 18 months due to shift changes). we have 34k savings this would be 40k+ by the time property is complete


Bills and living expenses- i calculate 2k based on mortgage and all other bills and living expenses. we provide complete breakdown when i get home from work.

Builder incentives 5% max- 6k towards deposit, 1.7k flooring through out and 2k stamp duty

ERICS_MUM

will the kitchen be fitted with cooker, dishwasher, washing machine, fridge, freezer or will you have to buy them ? This would have a big impact on your budget of £5k for furnishing the house.

Plus you'd be surprised how much it costs to buy the basics such as curtain rails, vacuum cleaner, crockery, cutlery, pans, other utensils, lamps etc (unless you have these already).

If you go ahead think you would need a biggish "buffer" - as said earlier, several months of mortgage payments plus enough to cover unexpected things such as the car needing major works.

Must admit I took out a largish mortgage many years ago and I managed by scrimping for the first 2 years, not because I was desperately short of money but so I could save a decent amount every month, keep my "buffer" going.

You are both young so you could postpone starting a family for a couple of years, this would give you time to see how your finances go and time to build up significant savings.

Good luck whatever you decide to do. Well done on saving so much.

kingstreet

dgtazzman wrote: »

If you are putting down 25k yourselves, you won't get 40k from the HTB scheme, they will only contribute that much on the scheme if you put down the minimum 5%, being 10k, yourselves

I have done plenty of cases with a deposit of more than 5% and a 20% equity loan. As long as the mortgage is at least 25% of the property purchase price, the amount of deposit shouldn't be an issue.

Also the builder gift of 6k could be a stumbling block. Some HTB administrators won't allow cash incentives, others have limits on them. Also, quite a few lenders have limits on how much cash incentive they will accept when considering the mortgage, at the very least it will have an influence on the valuation of the property

The HCA HomeBuy Agent shouldn't have a problem with cash incentives upto 5%. As you say, many lenders will simply reduce the valuation as they don't take cash incentives into account.

However, one or two do, so this is not totally unworkable.

monty-doggy

30k after tax is 1900 ish
26k after tax is 1600 ish.
That's £3500 not £4k. That's quite a big difference.

You pay £1300 each a month, so one of you has £600 and one £300 left a month.

That's not a lot. What happens if you need to pay for something that may go wrong in the house? Boiler? Washer? Anything, there's no landlord to call.

You are earning enough to buy but the overpayments seem unrealistic.

My oh and I earn similar to you, we've bought a 3 bed semi with a 54k deposit and mortgage of 114k.

Our out goings inc food, fuel and car payments and child maintenance are 2200 per month. We are now trying to get a bit of savings behind us as you never know what can go wrong.

You have enough to buy, but reconsider the overpayments, and save a nest egg before you overpay.