FTB needing advice and reassurance

dippa

Housebuy12345 wrote: »

So you minimal contractual take home pay is up to £25k and £20k according to an online calculator.

£300k in the midlands, must be special?

Have you visited a mortgage advisor just to get a mortgage in principle. Lasts for three months but will give you a firmer idea of what you can borrow.

Personally I wouldn’t want the hassle of having a big mortgage just yet, because you can always sell and buy a better house when you need to. Perhaps get a house that requires some work, use your disposable income?

Have you viewed houses? I’ve viewed one and it put it into a bit more perspective that it’s not a rental and a ‘forever home’ with a ball and chain.

Yes our basic contractual take home is £55k call it.

We're after a decent sized detached house and so far all the ones we like are pushing £300k.

Yes seen a mortgage advisor last year before we started saving and was told we shouldn't have any problem with the figures we gave him. We didn't get a mortgage in principle but nothing has changed with our circumstances since. We're arranging to go see him again soon to weigh up our options.

kinger101 wrote: »

I think paying a load more money for stamp duty, estate agents, surveyors, legal, mortgage and removal van fees needs to be considered.

It's good to take a long view.

Extremely good point! That's just put me in favour of getting the house we want first time round.

dippa

DrSpendLittle wrote: »

How will you cover PhD fees and will your partner be able to maintain a £25K income whilst doing the PhD i.e. will she be doing it part time? What is her field of expertise?

If she gets a 'full time' scholarship to cover fees and provide a stipend, she typically wouldn't be able to generate a £25K salary too as most funding organisations don't allow you to work alongside your PhD or restrict the amount of hours you can do, but I'm only au fait with my particular area of specialism. I know for example clinical psychology is totally different than arts and humanities or STEM subjects. In any case, you may want to consider a change in her financial circumstances if she decides to do the doctorate and what impact this may have on her net take home pay / scholarship amount.

As regards how much to spend, where do you see yourself living in 8-10 years time? Are your jobs 'sticky' to a particular place or are you more footloose? The transaction costs of selling / buying are more than just buying so do bear in mind that if you think you may want to move in the next 5-7 years. If you partner wants to go into academia as a career, she may have to move for her first post-doc or lectureship as it's so bloody competitive nowadays. Again, that's all subject dependent, but worth bearing in mind if you're making a big investment decision today that will be subject to decisions yet to be made by your future selves.

Good luck with whatever you choose to do!

She's going to be doing a doctorate in clinical phycology, which is funded by the NHS and also pays her a salary of £27k. So this won't affect our income.

We are quite fortunate with our careers, including my partners future career in the fact we aren’t particularly limited to an area, so can be more flexible in our area choice.

I imagine that in 5/7 years time we will have settled in our careers and hopefully have a family of our own. My partner has no interest in a career in academia so this should be no issue for us.

Thanks for your advice DrSpendLittle, you've given us plenty to think about.

SeaVixen

Hi Dippa!

I'm part-way through buying my first house, and had a similar predicament for a while.

We have a (possibly achievable, we'll see...) goal of being mortgage free in the next 12 years. So we opted to stay under the limit.

We came to the conclusion that buying a house over the £250,000 limit would be costing us £250,000 + £4k bonus. So we started thinking "is this house worth [our potential offer + £4k]" and more often than not it wasn't quite worth it.
We never properly considered buying something over the stamp duty limit, as adding that onto the above calculation meant that it was way over what we would be willing to pay for a house.
However, we were mindful - as others have pointed out - that the costs of moving again in 7 years would possibly outweigh the money from the bonus. So we were really puzzling over this for a while...

We have eventually got lucky and found a house that we like just under the limit, that is big enough for us to grow into, so the dilemma has resolved itself.

This wasn't actually advice, but just wanted to show some FTB solidarity!
Good luck!

Nbutterworth1

Not sure if anyone else has mentioned it but have you considered switching your HTB isa into a LISA? You can use that on a house up to 450K and get a 25% bonus on 4k per year.