Buy the most you can afford?

Greyhorse · 3 March 2017 at 1:35PM

Neilio believe it or not we are in Durham- however we are in a village full of bungalows priced at 250-400k. There are only around 10 houses for sale here to choose from at the moment.
We could move further into the town or even Durham city but I prefer where we are.

Expensive house also requires modernisation. I expect if it was done the price would be significantly more.

I think a financial advisor may be the way to go!

Mortgage offer was for 300k- madness and there is no way we could afford that amount.

Greyhorse · 3 March 2017 at 1:41PM

Slinky there is a 3 bed detached we are looking to view priced at £180k which would make us more more comfortable. Only drawback as it's on a newbuild estate and I'm concerned about being so closely packed in as these estates tend to be!

clint_S · 3 March 2017 at 1:50PM

neilio wrote: »

Wow! What area of the country is this?

Ithaca · 3 March 2017 at 1:59PM

If rates do go up they will go up slowly, half a percent at a time which gives you time to adjust. There are too many people who would be in dire straits for the Govt to risk raising interest rates to high too quickly (IMO).

The other thing to consider is where you are career-wise. We've just stretched ourselves hugely to buy our forever home but we are both still in a position where our salaries should continue to rise over the next 10-15 years which may offset some of the risk of an interest rate rise.

GoldenShadow · 3 March 2017 at 1:59PM

People's ideas of things being tight vary greatly. I would have said I was risk averse but both purchases we have pushed ourselves more than I initially wanted. People will interpret it as riskier than some though. We are in our 20's, no kids, career development available etc. Our new payments will be about £1350 a month and our take home is about £3800. Otherwise we will end up in what is effectively a second starter home. I'm not paying a lot of £ to move for that.

pjcox2005 · 3 March 2017 at 2:09PM

Greyhorse wrote: »

Our joint income is around £2600 per month however isn't likely to increase significantly any time soon.

There is no way I'd push myself to a £1,000 a month mortgage on a combined salary of £2,600. Throw in bills and food, you'd presumably be getting close to £2,000.

That simply won't be sustainable on the loss of job for one of you, children happening if you don't have them already etc.

For some reason people class houses as separate to todays commercialism as they "always go up" so support going to the most you can get, but if you'd have plenty of room in a 3 bed, then lower costs, less stress and more time to enjoy life is surely worth considering.

always_sunny · 3 March 2017 at 2:16PM

pjcox2005 wrote: »

There is no way I'd push myself to a £1,000 a month mortgage on a combined salary of £2,600. Throw in bills and food, you'd presumably be getting close to £2,000.

That simply won't be sustainable on the loss of job for one of you, children happening if you don't have them already etc.

For some reason people class houses as separate to todays commercialism as they "always go up" so support going to the most you can get, but if you'd have plenty of room in a 3 bed, then lower costs, less stress and more time to enjoy life is surely worth considering.

Absolutely - 2600/3 = 866 on housing and that including CT, bills, etc!

moneyistooshorttomention · 3 March 2017 at 2:25PM

pjcox2005 wrote: »

There is no way I'd push myself to a £1,000 a month mortgage on a combined salary of £2,600. Throw in bills and food, you'd presumably be getting close to £2,000.

That simply won't be sustainable on the loss of job for one of you, children happening if you don't have them already etc.

For some reason people class houses as separate to todays commercialism as they "always go up" so support going to the most you can get, but if you'd have plenty of room in a 3 bed, then lower costs, less stress and more time to enjoy life is surely worth considering.

But then I'd argue that children don't just "happen". If one can't afford them - then one doesnt have them - end of.

On buying my first house I was paying out a higher proportion of my (single) salary than that to start with - but I stretched and stretched. If I'd bought what was (apparently) affordable - then I'd have got a 1 bedroom flat and not a 2 bedroom house. It was the correct decision to make.

Don't forget to factor in all the hassle of having to move "unnecessarily". I wish I'd had the money personally to go straight to "forever home" house and would have done so if I could.

The thing about buying a "forever home" straight off is that no money is wasted on swopping and changing house. You can get on straight away with getting your "final" furniture/etc and aren't having to wait (eg your "final" sofa won't fit into a "temporary" house - so you buy an interim one to do you until you move and so on).

So having children (or no) is under your control. Interest rates and what employers get up to regarding your jobs isn't under your control. But one can only make allowances for a certain number of factors and not try and second-guess every single thing. Unfortunately - Life is something that we can't micro-manage to within an inch and decree exactly how it's going to be (darn it...!).

teddysmum · 3 March 2017 at 2:38PM

OP, I'm assuming that you aspire to a 4 bed house partly because you intend to have children. However, if things will be tight now, they will be worse when you have a family to support (children and childcare, especially , are expensive) and those children's wellbeing will come into the risk zone, should you fall on hard times, especially in these times when few jobs are set 'for life'.

leespot · 3 March 2017 at 2:42PM

Greyhorse wrote: »

We do love the 4 bed however to purchase would mean borrowing money from parents to cover the shortfall and paying this in addition to the more expensive mortgage as we do not have enough equity in ours. This is more the problem than the mortgage itself but family would lend us the shortfall.

If we buy a 3 bed it is likely we will want to move however we might love it there too so it's hard to tell! All of the 4 beds in the area start at the 200k. House we like is 230k.

The cheaper mortgage is somewhere in the £700 figure and the more expensive one £1000 per month.

Our joint income is around £2600 per month however isn't likely to increase significantly any time soon.

This is the only really important part in the decision making - if you need to borrow then you should honestly consider your options really carefully. Your mortgage would increase by £300 per month, not taking into account the amount you'd need to repay your parents.

Stick with the house you can buy without needing to borrow, and work your way up to the next place when you can afford it comfortably.

Buy the most you can afford?

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