How much can i really afford??

rpitchfo

So, wanting to move house and been running the figures through the lovely bank affordability calculators. However, there is obviously a conflict of interest here and the average quote is about £250k.

So i thought it might be wiser to lean on the collective insight of the MSE forum and ask what you feel i can really afford, or what you would opt for in terms of a mortgage size/ repayment.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1640
Partners monthly income after tax....... 1524
Benefits................................ 82
Other income............................ 0
Total monthly income.................... 3246

Monthly Expense Details
Mortgage................................ 557.5
Secured/HP loan repayments.............. 268.29999999999995
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 91
Electricity............................. 68
Gas..................................... 0
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 53
TV Licence.............................. 0
Satellite/Cable TV...................... 35
Internet Services....................... 0
Groceries etc. ......................... 306
Clothing................................ 90
Petrol/diesel........................... 150
Road tax................................ 2.5
Car Insurance........................... 11
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 30
Childcare/nursery....................... 0
Other child related expenses............ 124
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 11
Contents insurance...................... 0
Life assurance ......................... 14.88
Other insurance......................... 0
Presents (birthday, christmas etc)...... 27
Haircuts................................ 25
Entertainment........................... 351
Holiday................................. 90
Emergency fund.......................... 0
Total monthly expenses.................. 2345.18


Assets
Cash.................................... 1500
House value (Gross)..................... 125000
Shares and bonds........................ 6450
Car(s).................................. 8500
Other assets............................ 0
Total Assets............................ 141450


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 83952....(557.5)....3.99<
Car loan.......................4832.....(268.3)....9<
Shared equity (15%)............18750....(0)........0
Total secured & HP debts...... 107534....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-


Monthly Budget Summary
Total monthly income.................... 3,246
Expenses (including HP & secured debts). 2,345.18
Available for debt repayments........... 900.82
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 900.82

Personal Balance Sheet Summary
Total assets (things you own)........... 141,450
Total HP & Secured debt................. -107,534
Total Unsecured debt.................... -0
Net Assets.............................. 33,916

A little bit of further information for context.

The amounts detailed are based on mapping our spending without restrictions for the last 6 months (i.e making no effort to be prudent)

we currently overpay on the mortgage

The car will be paid off in Feb 2016

We currently pay childcare through childcare vouchers and the take home pay reflects this. little one is 15 months old

We will both will see pay increases year on year of a couple of thousand pounds a year.

I'd be interested to hear of anybody in similar circumstances and what kind of mortgage they have.

kingstreet

Every lender I know uses gross annual income - split between basic and variables, in its affordability calculators.

You've given far too much details of things we don't need and not provided the things we do.

TBH if you want to establish the most you can get from different lenders, go through factfind with an independent broker (ask friends and relatives for a recommendation) and they will sort out what's possible.

kingstreet

rpitchfo wrote: »

So, wanting to move house and been running the figures

Number of adults in household........... 2, children 1

Basic salary app 1 - £
Overtime etc app 1 - £

Basic salary app 2 - £
Overtime etc app 2 - £

Salary deductions - childcare vouchers, season ticket loan, student loan etc ?

Number of children in household......... 1 (Under 2)
Benefits................................ 82 (child benefit £1,066 pa)
Other child related expenses............ 124 (balance childcare after vouchers?)

Secured/HP loan repayments.............. 268 to Feb 16

House value (Gross)..................... 125000

Mortgage £83952
Car loan £4832 £268 pm
Shared equity (15%)............18750

residue after sale £22,298 assuming car finance not repaid

Fill the gaps and completing the calculators effectively should be possible for you.

rpitchfo

sorry, i probably wasn't very clear. I know what the banks are prepared to lend me. But in the real world (hence the breakdown of my expenses etc) what can i actually afford to pay?

I would value personal experience from people in similar situations.

kingstreet

Ah, sorry.

I thought you wanted to know what you could borrow.

TBH only you can tell yourself what you will be comfortable paying each month, based on your income and outgoings.

JustinR1979

Doesn't that depend on what you feel comfortable with having left over at the end of each month after everything is paid?

Thrugelmir

As an observation you have little to no savings. Personally I would be comfortable with sufficient savings to cover at least 6 months expenditure.

Do both of you have pension schemes in place?

ACG

How much do you think you can afford to spend on a Mortgage each month?
How many years would you like to have the mortgage over?

rpitchfo

Yes, we only have 6400 in savings and that was going to make up part of the deposit.

we are both 28 and both have pension schemes in place.

rpitchfo

well looking at the figures i think we can afford to spend £1000 a month on a mortgage over 30 years.

car repayments will ease soon, childcare won't last forever - then we can look at reducing our term.

but is that sensible.

ACG

If you assume interest rates are going to settle a little higher than they are now (I have used 5%) then I would say you could probably borrow around £190,000.

Depending on the size of your deposit as a percentage then rates may actually be more or less than that bit it gives you a ball park figure.

Going off what you have said above about having £6k deposit, then I would say your rates are going to be a touch above 5% as things stand at the moment.

Thats assuming you can actually borrow that much, which I have not checked.