Stretching ourselves to the limit for the chance of our dream house?

steampowered

The seller could be time waster. It's not great that they haven't even started looking for their next property. 

The seller could easily take months and months to find a house they like. Then it will be another few months for the conveyancing. By all means put an offer in - but keep viewing other houses until your seller is actually proceedable !!!

It is absolutely fine to stretch yourself a bit for your first property. As long as you both keep your jobs, you should have no problem keeping up your repayments. Lender affordability criteria are much tighter now than they used to be so you won't be stretching yourself as much as people did in years gone by. After a few years of repayments you will have a lower LTV which will allow you to remortgage onto a cheaper rate.

DayDreamerandGeneralWaster

You might not be worried about the mortgage payments now but what if interest rates go up? 

RoseGold2021

As others have said, get a DIP - that’ll tell you how much you can borrow. Also factor in should interest rates rise?? If they do, will you be able to afford it?

ShilvaA

The helping hand mortgage commands that you lock in to a 5 year fix. We intend to overpay on our mortgage for those 5 years and our jobs are incredibly secure so I am honestly not worried about the affordability in the slightest.

Its all a moot point if the sellers reject our best offer anyways, I just wanted to make sure my best offer was actually feasible. I don’t want to waste their time nor do I want to lose out on my dream home by not doing my utmost to secure it.

I will get the DIP from Nationwide tomorrow.... and providing that shows me what Inreally hope  it does. I will stick our offer on.


the house has only just gone onto the market, and our offer if quite a bit under the asking price. £376k-380k rather than the advertised £400k.

I am hoping us being in no chain and being able to go as fast or slow as they want might be a benefit that makes our lower offer more attractive.

[Deleted User]

If you’re getting a DIP get one through a whole of market broker. There can be quite a difference in how much you can borrow depending on the lender. 

Getting_greyer

No. You should continue to rent for the rest of your life because interest rates may become unaffordable at some unspecified point in the future. 

[Deleted User]

Getting_greyer said:

No. You should continue to rent for the rest of your life because interest rates may become unaffordable at some unspecified point in the future. 

What an odd response.

Renting for the rest of their life is clearly not what they want to do, they'll be very aware that interest rates fluctuate and they're going into home buying because it suits them - not everyone has your viewpoint. 

Bricks and mortar is a good investment - renting is dead money and this couple choose the former.

HampshireH

[Deleted User] said:

Getting_greyer said:

No. You should continue to rent for the rest of your life because interest rates may become unaffordable at some unspecified point in the future. 

What an odd response.

Renting for the rest of their life is clearly not what they want to do, they'll be very aware that interest rates fluctuate and they're going into home buying because it suits them - not everyone has your viewpoint. 

Bricks and mortar is a good investment - renting is dead money and this couple choose the former.

Presumably they were being sarcastic... That's certainly how I read It

jazzyja

My DIP was some sort of fairy tale. Because when I actually applied they amount they were prepared to offer was actually quite alot lower. Although I keyed in everything correctly. Luckily the property im in the middle of purchasing is alot cheaper than I originally budgeted for. So you being at your top end of budget you might be disappointed when it comes to the actual application 

getmore4less

As said DIP needed to find out what you can borrow otherwise could be a waste of time.

looking at the numbers borrowing is likley to be your main limiting factor. 

At ~£30k each that £4k net before the maintenance etc. 

Helping hand rate for the 5y @ 85%
2.54% £1,499
2.59% £999
2.79% £0

using £382.35k  85% £325k over 40years(to get close to the £1,100 payment)

amount	rate	payment	owing
£326,499.00	2.54%	£1,124.46	£298,804.51
£325,999.00	2.59%	£1,124.46	£299,071.19
£325,000.00	2.79%	£1,124.46	£301,281.36

At that size the higher fee saves you money over the 5y

LTV after 5 years 78%
current retention rates 80%
2.04% £999
2.44% £0

if overpayments and price rises can get you to 75% then the rates look a lot better
1.34% £999
1.74% £0

in effect you have 4-5 x 0.25% price rise safety built in if you can get to 75%  only 2 with 80%.


Tight but doable, you costs will go up owning +£400 more than rent for the mortgage.
you will empty your saving pot and  be saving at a slower rate.

What the chances of pay rises as they can ease the issue quite a lot in the 5 years?

With £299k 35y remaining and rates did rocket they are no where near as bad as some make out.
4% £1,324,
5% £1,510

I think you have enough margin to take interest rate rises 

You know your cuurent split,  £4k  £1.5k-£2k house costs, £1k living  £1k saving looks feasible.


I would rebuild a savings pot before starting the overpayments