First time buyer with Anxiety

Robfirstbuyer

Morning all,


Me and my better half are looking to buy a house soon.
Basically im looking for anyone with experience to perhaps give us some advice / dos donts etc.
I have talked to my parents however some outside opinions would be great.
Obviously having anxiety (reducing anti depressants so its on its way back to normal), I think a lot about what could happen, and its made me a bit overwhelmed.


We are both 25, working. We have lived at home so have saved a deposit of ~£55k.
After tax I take home slightly over 2k (not including bonuses) and she takes home ~1200 (she is just over the personal allowance threshold)


We love a property on the market for £250k, so our mortgage would be ~£775pm. (25 years)
The fees inc stamp duty etc, is likely to come to ~6k (we do have a few more grand in the bank to start to pay these).
The mortgages and bills would likely to come to £1,100 a month, which would leave (me on my own) about £930. (im thinking of her stopping work one day)


With all my car payments and committed money (eg sports etc), on my own, I will be left £650 ish.


(this doesn't include food prices).


Im just wondering if this is a reasonable amount to live on per month in regards to food, saving etc etc.
I do get a bonus a couple of times a year, so that will always help.


But this will leave us no savings for emergencies immediately.


I think we could save a lot with both our wages, but if its just me it may be more difficult.


Basically my questions are:
Is a 250k house (£775 pm mortgage) reasonable for an after tax income of ~£2,030?
Is there any way I could be saving money on essentials (eg petrol is about £150 a month)?
Apart from the help to buy ISA, is there anything a first time buyer could do to save money?
How can I reduce the risk of losing money if the sale falls through?
Would ~£650 pm be enough to support a family in regards to food etc?


Any help would be great, thanks for reading.

MandM90

Have you spoken to a mortgage broker to see whether a bank will believe you can afford it?


You really need to budget it all our properly, to see for yourself.


We spend £200 a month on food for three of us.


Then £100 elec and gas on a small semi


£150 on diesel


£31 water


£80 for mobiles, phone and internet


£50 a month saved for clothes for everyone


£40 a month towards Xmas


£40 a month dental insurance


£15 a month for my other half's haircut (I trim mine with the kitchen scissors!)


£8.20 a month for my prescription




...so that's an easy £715, and I wouldn't say we are particularly 'spendy' in any of those areas!


We also have 'pots' of savings for car maintenance, home maintenance, pet emergencies, general emergencies, holidays, gifts and career development. Personally I wouldn't feel comfortable not having these. Could you save up another £5-10k BEFORE you move so you have a buffer. This only begs the question of how you replace the fund if an emergency occurred.


Presumably even if she doesn't have a car and doesn't work your OH will need money for transport of some type?


Even if you get the mortgage in the first place will you be able to remortgage with only £2000 after tax? What will you do if interest rates rise in the future? Or if you have an expensive home maintenance issues? Or car issues? Or someone needs root canal?


Can you live with never eating out, never going on holiday (we put away £100-200 a month for that, because we feel it's a necessity!), not buying gifts or having parties.


Personally, in the nicest possible way, I think it's optimistic to hope for your other half to give up work, but you need to do the maths and figure it out for yourself.

Robfirstbuyer

Thank you for the reply,


Well basically, she will work until one day she may be with child was what I was thinking.


She bikes to work and I pick her up (included in petrol prices), and a broker has said we can easily afford it based on net income per month at about 3.2k. But on just my own? Not 100% sure.


But on my own, it may be more of a struggle to keep children, the OH does love work and wont give it up completely, but it will reduce the income a bit.


The house we are looking at doesn't need any work (its 9 years old) and kept very well.

MandM90

Robfirstbuyer wrote: »

Thank you for the reply,


Well basically, she will work until one day she may be with child was what I was thinking.


She bikes to work and I pick her up (included in petrol prices), and a broker has said we can easily afford it based on net income per month at about 3.2k. But on just my own? Not 100% sure.


But on my own, it may be more of a struggle to keep children, the OH does love work and wont give it up completely, but it will reduce the income a bit.


The house we are looking at doesn't need any work (its 9 years old) and kept very well.

My ex just bought an 8 year old house and two weeks ago I had to sit in for them so the plumber could come and look at a leak so never say never. He's also had issues with the conservatory (our Victorian home, however, is yet to cause any problems whatsoever). It's always worth having money put by.


If she's not planning on giving up work any time soon, there's no reason to worry about it. You could be earning more by then, so could she!


Don't forget to make sure you account for survey, solicitors, mortgage arrangement fees and stamp duty.

f2f

What mortgage deal are you looking at, a 2 year fix/tracker? I assume the 775 per month is based roughly on current very low interest rates, which are very likely to rise over the next 25 years, meaning payments would be significantly more.

[edited out, misread income as pre-tax]


At your age, you could consider a longer term than 25 years?

Are you still living with parents or are you now renting?

Robfirstbuyer

Thanks again MandM,


As I said above, the old anxiety has made me go over it LOTS of times.


I was just curious if it was reasonable, together we will afford it no problem at all, bills etc would be £1,100 ish (not including car etc) and we will have about 2.1k left between us, which im sure plenty will go into savings.


As with mental health, you can write and rewrite, but its never enough to convince yourself, kids wont be for at least 3 years, but you never know.


It seems after all my bills and mortgage payments, commited funds and car stuff, id be at about £650 per month on my own. Or £990 if we are working together.


This SHOULD be enough to live on?


I think the stamp duty etc will come to around 6k, which we should have savings to pay at least half off.


I don't know I think im being a bit stupid with it all, and I think I will be comfortable paying this.


Worth a question I guess?

Robfirstbuyer

It would be a 2 yr fixed rate, together we earn, including bonuses etc about 54k. (Bonuses are about 4-4.5k)


We are living with parents atm, and its a great position for a first time buyer to be in.


I think if I was getting a bit overwhelmed I would go for a longer term.


We don't smoke, rarely drink etc, we are quite careful how we spend to be honest.


As long as I can afford it, have a bit of money to save and take some time to enjoy life (im sure we would all like that) id be happy.

f2f

Whilst it's sensible to work out what you're spending and budget, lenders are now stress-testing your affordability in case rates rise anyway, in the short term they are unlikely to significantly, so they will probably leave you a decent chunk for discretionary spending and sounds like you're fairly frugal.

So I wouldn't get overly stressed about it but I would be very careful about what you're spending, depending who you go with they might want to see 3-6 months bank statements when you apply.

I would definitely speak to a broker, they can take a lot of the stress out of it and will know which lenders best suit your profile i.e. accept your bonus as income.

Thrugelmir

Robfirstbuyer wrote: »

Is a 250k house (£775 pm mortgage) reasonable for an after tax income of ~£2,030?

If interest rates were 7% how comfortable would you feel then?

The future is uncertain. Low interest rates may well not last the next 25 years.

Robfirstbuyer

Thanks all, we are seeing a mortgage person Wednesday, and taking a savvy pair of parents around tonight.


If interest was 7% (1300 ish pm), it would be very tight, but together we could manage, after bills it would leave about 1000-1200 for everything else.


This is obviously without little rugrats which are likely to be part of the plan in half a decade or something.


We will see, I might end up dying tomorrow.


Thanks again for all the help.

MandM90

I don't know what job you have or your planned career trajectory, but do remember it's unlikely you'll be earning what you earn now forever. And Ms/Mrs Rob might bring home more in the future, too.


If you find a good mortgage/financial advisor that you trust, and have savvy parents, all telling you that you can and should go ahead, then do it.


I used to be very anxious about money (and in general, luckily with a bit of a lifestyle change and medication, which I'm now off, I managed to overcome it!) but I now use a budgeting software called You Need a Budget. It has a 34 day free trial and costs about £3 a month, but is sooo worth it for that feeling of absolute control!