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

Davesnave

GDB2222 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. 

 there's clearly a middle ground between continuing to rent and taking on the largest possible mortgage. 

And doing it in exceptional times when the future is particularly uncertain.

Crashy_Time

lookstraightahead 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. 

Although this is clearly sarcasm, the advice you give would have served me well as a youngster, instead of everyone banging on about house ownership.

I borrowed to the max, interest rates skyrocketed so I had to swap to interest only, split up from my spouse and lost one heck of a lot of money as house values plummeted. Wish someone had told me to keep renting.

Op, do not push yourself to the max, make sure you can comfortably afford your mortgage if interest rates double or triple. Think about if one of you list your job, think about other expenses. 

Im not for one minute saying you won't think about these things, but you don't want your dream house to turn into a nightmare house.

Good advice. Of course if mortgage rates do start rising, even although the OP may have fixed for a few years, new borrowers won`t get the same rates so the house you have stretched yourself financially for will now be falling in value, and say your lender came along and valued it at 350k OP, what would you do then?

ShilvaA

What do you mean @Crashy_Time?

If the lender values the house at £350k then I have no choice but to pull out of the purchase (if they accepted our offer).

If you mean when I come to remortgage, then it won't matter in the slightest as it will be my home. I pay 8000 in rent now for a real small 2-up, 2-down. My pigeons maths puts that at 40k a year (if my rent doesn't rise).

So If I my home was technically 'down' 50k in value... I still had 5 years enjoying a beautiful home and I will still actually own something at the end... thats worth an extra 10k on top of what I would have paid in rent anyways.

stressedout45

i know it is going to be tight, but does that sound doable? It is honestly exactly what I want from a forever home and I have quite a few very strict criteria. Its a rare find  

Don't spend all your money on a house.  It sounds very tight.   Life is about more than the "dream" house and the novelty of being inside four beautiful walls will soon wear off if you don't have enough spare to save up for other nice things! (Sorry) 

t2havock

I would push to get the best you can at the outset- bearing in mind that a house now is rarely ever a forever home (after all life isn't life anymore). But getting something that suits your now and potential future needs would save you as buying costs are steep and getting steeper always...All risks considered of course! 

lookstraightahead

ShilvaA said:

What do you mean @Crashy_Time?

If the lender values the house at £350k then I have no choice but to pull out of the purchase (if they accepted our offer).

If you mean when I come to remortgage, then it won't matter in the slightest as it will be my home. I pay 8000 in rent now for a real small 2-up, 2-down. My pigeons maths puts that at 40k a year (if my rent doesn't rise).

So If I my home was technically 'down' 50k in value... I still had 5 years enjoying a beautiful home and I will still actually own something at the end... thats worth an extra 10k on top of what I would have paid in rent anyways.

I do get what you're saying - buying seems a no brainier compared to renting.

However, like I said happened to me, if you don't have the wiggle room for your mortgage increasing a lot, or not having 6 months savings if one of you lose your job, or a number of other very real things, then you can lose your home, and then you're no better off than renting.

all I'm saying is don't max out for a"dream" home that you can't afford.

can I ask , how much income will you have after you've paid your mortgage? Before bills etc? 

kungfu_navs

Don't forget to factor in your first mortgage payment which may be higher than your standard monthly payment.

ShilvaA

No news on our offer yet.

lookstraightahead said:

ShilvaA said:

What do you mean @Crashy_Time?

If the lender values the house at £350k then I have no choice but to pull out of the purchase (if they accepted our offer).

If you mean when I come to remortgage, then it won't matter in the slightest as it will be my home. I pay 8000 in rent now for a real small 2-up, 2-down. My pigeons maths puts that at 40k a year (if my rent doesn't rise).

So If I my home was technically 'down' 50k in value... I still had 5 years enjoying a beautiful home and I will still actually own something at the end... thats worth an extra 10k on top of what I would have paid in rent anyways.

I do get what you're saying - buying seems a no brainier compared to renting.

However, like I said happened to me, if you don't have the wiggle room for your mortgage increasing a lot, or not having 6 months savings if one of you lose your job, or a number of other very real things, then you can lose your home, and then you're no better off than renting.

all I'm saying is don't max out for a"dream" home that you can't afford.

can I ask , how much income will you have after you've paid your mortgage? Before bills etc? 

So, our take home is about £4000 a month before before I do any extra shifts.

My predicted budget is....

Mortgage £1200
Council Tax - £200
Insurance - £70
Child maintenance -£170
Utilities - £200 (In our current house it’s about £100 for water, gas and electric, perks of being at work all the time I guess)
Car stuff - £450 (This house is closer to our works so might be less)
Food - £350 (Currently £250-300)
Internet - £30


Most of those estimates are quite generous compared to how we are used to living now.

So on a rare month of no OT, we should still have £1000-£1200 left over every month for things like overpaying and luxuries or unexpected bills etc.

Most OT shifts net me an extra £200(ish) take home for added fun as well.

Bluebell1000

That looks very workable to me. You should allow a bit for house maintenance and repairs. We have a rough long term spreadsheet for our house, planning when we are likely to do bigger jobs over the next 10 years (eg changing windows, replacing kitchen) so we can plan our budget for that year.
 Fingers crossed you get good news on your offer.

ShilvaA

I am also guilty of having multiple spreadsheets on the go.... the maintenance one sounds like a really good idea. 

Thank you