Options to buy a house.

ReadingTim

Sure you think you can afford to buy a house and pay the mortgage right now....

Problem is that you have a history of spending more than you earn (you, debt of £20k) and not paying it back (wife, IVA). That sort of track record doesn't look to good to a lender.

Worse, you say you're looking to have kids soon. So that £61k of combined earnings is going to drop - let's say by half. Your costs will go up too, as you've got another mouth to feed. Longer term, even if the Mrs goes back to work, there's child care to pay for, at least until the kid's of high school age.

Your options are therefore lifestyle and kids, or house.

Suggest you save, save, save, turning your £20k debt into a similarly large deposit, by which time the wife will be off the IVA and you won't be laughed out of town by the mortgage companies. Buy the house then think about kids. Hope that helps.

Jon_B_2

OP, to give you some idea our household income is around £62k, so broadly similar.


Our rent was £780/month, so again broadly similar.


I must add that we don't have any car finance, but about £3.5k left on a loan at £250/month. I also have a fully expensed company car which costs me around £300/month in tax.


Before we had our first child, we were able to save between £800-£1,100/month depending on frugal we were. We didn't cut our lifestyle back that much tbh, but I did cancel our Sky sports package and managed to negotiate the Sky Family package to £16.50/month.


So based on you being able to put about £1k/month away comfortably towards your debts, you could be debt free in about two years from now.


To give you an idea of how kids impacts things, my wife fortunately got a significant rebanding at work when she went back after maternity leave which meant she went back on a part-time wage three days a week at largely the same salary as before.


But. With childcare costs, we are currently saving about £400-600/month and we are living much more frugally now.


In November, we are moving into our new house and was able to save up the 5% deposit of about £14k in roughly speaking two years (My wife was on maternity leave during this period, hence why there wasn't more saved!).


I reckon if you put your mind to it, you could buy a house in about 5/6 years time. Gives you something to aim for. I do think you need to work out what is important though.


To really put things in perspective, we have been renting for six years by the time we move into our first home. We will have spent £56k in rent...

seanym007

Wow! Thank you everyone for the feedback! I'm really pleased I posted on here even if I didn't get the magical answer I was wishing for. You're all correct, and I will review my outgoings and make cuts..

Perhaps desperate was wrong, but I'm glad some people understand that there's more story behind the figures. Yes I've got debt, I hate having it, and yes I could of made better decisions, but this is where I'm at. I'm determined to clear the debt and secure my families future..

So a couple of answers, we live in Newcastle upon Tyne, so a 200k house is what I'd be hoping for. The debt split is £10k left on a loan (8.5%), £8k left on another (27%), £5k on a credit card (16.9%), so 23k in total. My credit profile has improved a little. I'm working to continue to pay off the debt, but make no further credit applications for at least 12months, after which I'll look to consolidate..

I've cancelled sky.. I'll look at the cars next..

Oh, and we're 33, so no time to wait and have kids...

Thanks

Tigsteroonie

seanym007 wrote: »

Oh, and we're 33, so no time to wait and have kids...

Thanks for returning, but :rotfl: :rotfl: :rotfl: we had our son at 40

seanym007

Tigsteroonie wrote: »

Thanks for returning, but :rotfl: :rotfl: :rotfl: we had our son at 40

Fair comment!

Jhoney_2

seanym007 wrote: »

Wow! Thank you everyone for the feedback! I'm really pleased I posted on here even if I didn't get the magical answer I was wishing for. You're all correct, and I will review my outgoings and make cuts..

Perhaps desperate was wrong, but I'm glad some people understand that there's more story behind the figures. Yes I've got debt, I hate having it, and yes I could of made better decisions, but this is where I'm at. I'm determined to clear the debt and secure my families future..

So a couple of answers, we live in Newcastle upon Tyne, so a 200k house is what I'd be hoping for. The debt split is £10k left on a loan (8.5%), £8k left on another (27%), £5k on a credit card (16.9%), so 23k in total. My credit profile has improved a little. I'm working to continue to pay off the debt, but make no further credit applications for at least 12months, after which I'll look to consolidate..

I've cancelled sky.. I'll look at the cars next..

Oh, and we're 33, so no time to wait and have kids...

Thanks

Really pleased that after some consideration you have decided to do a review - that's a great response.

There's a lot of bad decisions made in life, so no-one is immune, but all posts were meant well and with a view to you making future decisions that bring about the outcomes you say you want.

It was not a lifestyle judgement, it was highlighting that the lifestyle elements were the obstacle.

If I may reiterate one more suggestion, pay something like minimum +£10 on the loan and CC, then throw the surplus financial kitchen sink at that 8K (27% :eek:) liability until it's extinct.

33? Not sure I knew how to make them yet at that age;) - You have a lot more time than you think - if you wish to take it...


You will get there, the conundrum is how quickly you wish to get it done.

All the best with it.

Jonbvn

seanym007 wrote: »

Plus there's our wedding and honeymoon, which yes we could of done a lot lot cheaper, however it's a once in a lifetime occasion. I do often think if we made the right decision, but that's all hearsay, it's done now..

It seems you have sacrificed part of your financial future on a wedding & honeymoon. There is a salutary lesson here, which I think in the short-term has denied you the option of home ownership.

Jhoney_2

Tigsteroonie wrote: »

Thanks for returning, but :rotfl: :rotfl: :rotfl: we had our son at 40

You get the Silver medal then...;)

Pixie5740

OP, have you ever read the Mr Money Mustache blog? Financial Freedom through Badassity.

He seems to get off on being frugal and whilst I myself am in no way frugal it did get me thinking about money in a different way. Every penny I pay in interest is stealing from my future self. You probably feel like that about the debts you have now as those debts are preventing you from saving a deposit.

It might be worth a read if you need some motivation.