Want to move - where to start?

hufc2002

Hi all


We want to move to a bigger house within the next year but have no idea where to start with this.


Currently owe £78k on our mortgage and expect our house to be worth between £85 - £90k therefore £7-12k equity.


We also have £11k in savings therefore if we add in the equity we will have between £18 - £23k to put towards a deposit. We will be looking to pay £180k max for a house but ideally around the £165-170k mark with a 10% deposit. We continue to save each month, anywhere between £200 and £500.


My salary is £24,300 and wife's is £38,250.


Debt wise I have a PCP with BMW, £389 per month with 30 months to run, wife has £3k on a credit card (0%) and a car loan for £177 with 25 months remaining.


Are we really in a position to move with the current debts we have? Are we being realistic in terms of property prices we are looking at?


If so, where do we start?


Thanks

agrinnall

With a joint salary of over £60K it ought to be straightforward to get a property in the price bracket you suggest, so maybe start with a look through the MSE Moving Home section on the Mortgages page. Don't forget to budget for selling, buying and moving costs.

hufc2002

Would it be a good idea to get an AIP before I do anything else and if so should I go to an independent mortgage broker for this?

I am just a little hesitant at the moment as I thought we possibly have too much debt therefore I would like something in writing to confirm how much we will be able to borrow.

getmore4less

£78k 20y 3% £430pm

£150k 20y 3% £830pm

As you are only saving £200-£500pm you are going to be stretched
review your spending now so you are in a better position in a year

cars £560pm

If you prioritized housing over cars you would have a much easier time and better position in a year.

net £1600 + £2300

With car+ mortgage + say £1k for bills leaves £1900pm
review your spending now so you are in a better position in a year

Unless you have a load of kids or other major expenses, saving £1k per month should be a doddle, £1500 not that hard.

hufc2002

We will still have 2 cars to pay for in a year, that position won't change.


Combined take home pay is approx. £3265 as we both sacrifice £243 per month for childcare vouchers as our second child (2 year old) attends nursery full time.


Mortgage is currently £389 per month (2.24%). We were previously paying £669 per month (one due to fixed rate and secondly at the end of the fixed rate we overpaid keeping the payment the same) therefore we are used to paying this amount. I don't feel £800 per month would be too much of a stretch.


Would lenders though?


Current mortgage plus all other bills including both cars totals £1713 per month therefore that leaves us with over £1550 per month. Increasing mortgage to £800 will still leave us with £1140. Is that too little?


As soon as the youngest starts school we will be better off again as we won't both be sacrificing salary for childcare.

Cakeguts

The cars cost more than the childcare. You may have to consider that you can't have a bigger house and car finance. Bigger houses have bigger costs.

hufc2002

Well there is no way of getting out of car finance early as one will be currently in negative equity, the other will be paid off in 2 years.

Are we living in cloud cuckoo land?

purplebuzz

Get an agreement in principle for what they will lend you with current debt levels and then get an estimate of mortgage repayments on what you can borrow and then factor in all potential outgoing so and see if you can afford it.

getmore4less

hufc2002 wrote: »

Well there is no way of getting out of car finance early as one will be currently in negative equity, the other will be paid off in 2 years.

Are we living in cloud cuckoo land?

Don't think so, based on current numbers, just heading towards the limit of committing future income with no backup/contingency funds.

You estimate your surplus as £1550 but are only saving £200-£500

Where is the rest going?

Is that with a £390pm mortgage payment or the £670pm

Why not estimate your new mortgage payment and start paying that now or just saving it and do some extra saving on top as well.

That will tell you what you can afford and build up more equity/saving.

You want to move and still have an emergency fund and be able to keep saving covering everything.


have you done a budget or at least a SOA.
http://www.stoozing.com/calculator/soa.php

do a now and and estimate for after the move(bigger bills).

hufc2002

Thanks for this.


What I now plan to do from the end of the month is start saving the difference between current mortgage payment (£310) and also difference between council tax (£39) and difference in fuel (£15).


After all bills have been paid including mortgage, how much expenditure/what percentage of take home pay should you have remaining?

Jox

Have you tried the mortgage calculators on banks' websites (Santander, Nationwide, Halifax, HSBC etc).

You can input all the figures and get an indication of what you could borrow.