Mortgage & Salaries

sarah539_2

Hello,
Looking for some advice/reassurance. Both my husband and I work full time and take home around 2400 each after tax every month. We are first time buyers and we have viewed a house where our monthly mortgage payments will be about 1100 a month. Putting all our outgoing together with the mortgage payments (ALL outgoings included as in food shopping, council tax, gas & elec, hobbies, memberships, direct debits, car finance, pet food etc etc) our total outgoings are around 2500 (with the 1100 mortgage payment). 

This is really freaking me out, if I lose my job (hopefully won't but you never know) our outgoings are more than one single wage. So I wonder, do most people just get the mortgage based on BOTH wages and I am just over reacting or do you make sure it's affordable on just one wage should one person become unemployed for any reason?
Am I over thinking 😂

Thrugelmir

Build an emergency savings pot to see yourselves through 6-12 months of monthly expenses. 

What's your employers sickness leave policy?  This too can result in diminished monthly income. 

Life is full of potential risks. Being prepared mitigates the majority of them. 

Hobicore

You can just cut back on out goings if things go wrong? Or get income insurance if you’re worried. 

FaceHead

Yes. You get a mortgage based on both of your salaries. 

1. How would a single person ever get a mortgage if the requirement was 'what if one of you lost your job'? You are much safer as a couple than a high earning singleton. 
2. If one of you lost your job, their income wouldn't become zero. They could get a job doing something, even if they needed to take a pay cut. As you've shown, you can each take significant pay cuts without getting into trouble. 
3. You should build up some sort of rainy day fund to last a few months if one (or both) of you lost your job and were temporarily out of work whilst finding a new one. 

sarah539_2

Thanks all for your comments. We do have an additional rainy day fund actually which would see us through 12 month. Both also entitled to full pay for sick leave.
I am just having a bit of a wobble I think, first mortgage and its a bit scary! 

theoretica

sarah539_2 said:

Hello,
Looking for some advice/reassurance. Both my husband and I work full time and take home around 2400 each after tax every month. We are first time buyers and we have viewed a house where our monthly mortgage payments will be about 1100 a month. Putting all our outgoing together with the mortgage payments (ALL outgoings included as in food shopping, council tax, gas & elec, hobbies, memberships, direct debits, car finance, pet food etc etc) our total outgoings are around 2500 (with the 1100 mortgage payment). 

This is really freaking me out, if I lose my job (hopefully won't but you never know) our outgoings are more than one single wage. So I wonder, do most people just get the mortgage based on BOTH wages and I am just over reacting or do you make sure it's affordable on just one wage should one person become unemployed for any reason?
Am I over thinking 😂

So if one of you lost your job you would be £100 short a month?  But in one month of you both earning you could put aside £2300 which would see you through just under 2 years with one of you jobless?  So yes - build up some savings for security and your peace of mind, and realise that a lower paid or part time job would plug the gap if necessary.

K_S

sarah539_2 said:

Hello,
Looking for some advice/reassurance. Both my husband and I work full time and take home around 2400 each after tax every month. We are first time buyers and we have viewed a house where our monthly mortgage payments will be about 1100 a month. Putting all our outgoing together with the mortgage payments (ALL outgoings included as in food shopping, council tax, gas & elec, hobbies, memberships, direct debits, car finance, pet food etc etc) our total outgoings are around 2500 (with the 1100 mortgage payment). 

This is really freaking me out, if I lose my job (hopefully won't but you never know) our outgoings are more than one single wage. So I wonder, do most people just get the mortgage based on BOTH wages and I am just over reacting or do you make sure it's affordable on just one wage should one person become unemployed for any reason?
Am I over thinking 😂

@sarah539_2 Generally speaking, you need to be comfortable with the monthly payment amount that you are committing to. Your's is not an uncommon worry and one of the mitgating steps you can consider taking is going for a term that is as long as you can get. This minimises your contractual monthly mortgage payments but still (with most products) leaves you the flexibility of overpaying to achieve the same effect as a shorter term.

https://blog.moneysavingexpert.com/2014/10/dont-shorten-your-mortgage-term-if-you-can-overpay/