Moving house - very large jump up - affordability

redrabbit29

I'm 30 years old and bought a VERY cheap maisonette in the South East. When I say cheap, I got it for £133k as it was being repossessed. I've been here 3 years, and it's now valued around £155k.

I own the property alone, however my partner and I are thinking of moving in the next 2 years to a nicer place - this one is not somewhere I want to live for another 5 years.

We have no debts
We have no kids
I'm a Police Officer - so very secure job
Her job is quite secure - but you never know I guess...

I've looked at houses at all values pretty much but the only ones that seem suitable and worth upgrading to are around £300k. These are 3 bedrooms with gardens + garage.

Finances

Our joint salary is £61'000
Our net income per month together is £4000
No debts like I said above

Repayment on a mortgage of £250k - bearing in mind equity in this property = £1342 per month - based on 5% over 30 years.

Question

That repayment seems reasonable considering our joint income. Now I know there are risks with mortgage rates increasing, and the cost of actually moving, and all the bills....

But I just wanted some feedback on our figures, and affordability. I've looked at other properties for a smaller value and they just don't tick boxes, i.e. all 2 bedrooms, no garage, bad area, or combined issues which make the idea of moving pretty seem pointless.

Thanks everyone.

getmore4less

2-6-14

https://forums.moneysavingexpert.com/discussion/4985345=

"I have £2283.73 on a Virgin Credit card which is being paid off and should be gone in about 4-5 months"

30-5-14
https://forums.moneysavingexpert.com/discussion/4983824=


Instinctively I know people will say "yes of course"... however:

I have £3k on a credit card which has been accumulated VERY quickly over the space of about 3-4 months due to several purchases which were required.

I have £3k in savings. The credit card is interest free.

It took me a long time to save that £3k, so I don't want to spend it! However, I think it's clear I should spend it, and clear the debt to start from a clean slate.

The plus is it's back to debt free. I won't have any savings, but I think it's the sensible thing to do.

Like I said, I think I know what to do, just wanted to "say it" outloud, and see if you agree?


Why have you not been able to save more?

You are looking to more than double your mortgage but have struggled to save £3k.

Current mortgage around £90k if you have £50k equity and enough for the fee(£15k) what's that costing?

You are paying your debt off at around £500pm.

Are both of those enough to cover the new mortgage?

I think you need a serious financial review as you don't seem to have a current spending pattern that will support this move.

What happened to the interest free in 30-5-15 that was gone by 2-6-14

You live in Bracknell so prices are high(ish).

beecher2

If children are on the horizon then factor in the impact on your income, as well as child care costs.

Also, an idea might be to save the difference between your present mortgage and the one you plan on getting - this will tell you how affordable it is, and also add to your deposit.

Mortgage_Mark_2

Over 4x joint income? Without taking into account expenditure?

Shovel_Lad

Do you want different answers to when you asked this in March?
https://forums.moneysavingexpert.com/discussion/4934553

getmore4less

Looking at march the base advise was start saving to be sure you can afford it.

Since then there has been a period of debt/no saving.

I think that advice was probably about right then

the best way to be sure on affordability is to start saving as if you had the mortgage and extra costs.

Review finances get the point where current mortgage + savings are around £1500-£1700pm.


As this is a 2 year plan the prices and rates are an unknown the thing you can do between now and then is prove to yourself what you can afford.


I would also be on the lookout for a bargain £250k that has potential that reduces commitment but needs to be something with potential to jump the SDLT barrier into the £275k+ range

Thrugelmir

redrabbit29 wrote: »

Repayment on a mortgage of £250k - bearing in mind equity in this property = £1342 per month - based on 5% over 30 years.

Highly optimistic to base a 30 year term at 5%.

After 15 years you would still owe a £170k. Not a level of debt that I would want to be exposed to personally with interest rates only heading one way.