Is an £135k home out of reach?

This_Girl

Hi,

Usual situation - renting, dreaming of home ownership.

So here is our situation:
- FTBs, currently renting @ £530pcm
- Hubby income £25k salaried.
- He would be the sole applicant as I am unable to work (too ill to work, "not ill enough" for benefits)
- £10k savings
- At least £5k extra available from parents.
- No children

We've found a small 2 bed house for sale at "guide price £135k - £145k" . Its in a good area, 25mins drive for hubby to work, good schools.

However, if 4x salary is the usual lent thats £100k mortgage plus £15k deposit (before even thinking about fees etc) = £20k shortfall. Is there any point in us looking into this further or is it an unrealistic dream?

Aware that we may not get positive replies but there may be schemes, ideas etc that we hadn't heard of before to look into It is not a new build so helptobuy wouldn't help!

Parents would love to see us buy a home and may be in the position to contribute further. However, if at all possible we'd love to do it without further help from them..

Thanks for reading x

Paully232000

a good amount of the the £5K from your parents could easily be used up in moving expenses, so maybe look to needing a mortgage (based on the lower of the guide price) of £125K, which at 5% mortgage could cost you around £700/month. I guess you could look at 35 year mortgages.

Work out what you would have to pay per month, including mortgage and see if you think it is realistic, and would leave you with anything left over each month for saving/emergencies etc

aaa13ljsldjfldskj

I earn 27k and my mortgage broker said that I could look at houses in the 150 - 160k bracket as long as I had 10%.

I have minimal bills - so I would have a lot left every month, its just getting the right deal.

135k at 4% for 25 years is approx. £710pcm.

kingstreet

You need to enter your details in different lender affordability calculators. Income multiples are no longer used.

As a non-working spouse you will be treated as a dependent, or joint applicant with no income and this will reduce the maximum borrowing.

See how this affects your plans.

A broker will be able to find the most appropriate lender for your individual circumstances.

missbiggles1

As a young FTB couple, why not start off with a small flat or a run down house you can add value to before looking at buying a family home?

aaa13ljsldjfldskj

missbiggles1 wrote: »

As a young FTB couple, why not start off with a small flat or a run down house you can add value to before looking at buying a family home?

its dependant on where the OP lives....

I live in Suffolk and such a house doesn't exist. A very small two bed is £140k+ and the 'builder-uperus' are long gone before they even hit rightmove etc...

and £530pcm for renting is very cheap. 2-3 beds are 600 - 850 pcm

This_Girl

Thanks everyone. Its looking unlikely then, but we will do some further research. The house is the cheapest in the area. Within the areas with the right distance between hubby's work and family (or near either) the cheapest 2 bed property (body clock is ticking and if I'm well enough and able we will be having children within 5 years) is an £124,000 flat with £1560pa service charge. Not looking good for now...so wish I could be a second earner

Car1980

Try a mortgage calculator.

I plugged my figures into Nationwide's 3 months ago and it would only come up with £92k.

Just tried in now and they'll suddenly offer me £152k.

By the way, moving expenses are for you to worry about after getting the mortgage. Put the £5k towards the deposit and stick any expenses on a credit card after approval.

LplateSaver

Car1980 wrote: »

Try a mortgage calculator.
By the way, moving expenses are for you to worry about after getting the mortgage. Put the £5k towards the deposit and stick any expenses on a credit card after approval.

For real? You mean solicitors fees etc? I didn't think that would be allowed and minus-ed it from my deposit total. Won't lenders ask to see proof of how you'll pay fees?

goodwithsaving

Car1980 wrote: »

Try a mortgage calculator.

I plugged my figures into Nationwide's 3 months ago and it would only come up with £92k.

Just tried in now and they'll suddenly offer me £152k.

By the way, moving expenses are for you to worry about after getting the mortgage. Put the £5k towards the deposit and stick any expenses on a credit card after approval.

........if they re-check you before completion (after exchange) and then find out you have taken on additional credit, you risk having the mortgage pulled but being legally bound to purchase.

Not a good idea!

It is also (imo) not good to take on extra debt to repay on top of a mortgage where monthly expenditure and bills associated with a new house are as yet unknown.

If you are considering having a family but the house will be a stretch, this will possibly make things quite tight in the future. Try figuring out likely repayments as a % of income. Rates are low now which is great, but they won't be forever. If you aren't going to be able to make significant overpayments to vastly bring down the debt owed upon remortgage, consider how future rate changes may affect you.

These are just my thoughts. Could be wrong but as I say, all stuff I would consider.

LplateSaver

goodwithsaving wrote: »

........if they re-check you before completion (after exchange) and then find out you have taken on additional credit, you risk having the mortgage pulled but being legally bound to purchase.

Not a good idea!

That's what I thought. I also thought that they would account for it when checking the deposit otherwise couldnt OH (who is getting a sole mortgage) put the fees on my card? If not I would be tempted especially if it was a 0% deal.