Repayments equal to half net income

Dozey_Mare_2

My partner and I have split. I would like to keep the house.

To do so, would mean that the repayments are just under half my net salary.

I have an offer in principle for a mortgage.

I also have a huge emotional attachment to my home, even though I moved out 6 months ago.

I just need your thoughts please, to see if there's anything I've not considered.

My net income is £4,400 and the repayments would be £2,050 per month.

Other bills would come to about £600 per month.

I have no other debt.

I have savings of approx £50k (ISAs)

I am relatively frugal, but intending to be a hermit in my lovely home for a couple of years, to heal my wounds. Anyway, I live in a very rural village and there is no local "social life", so no temptation - other than the Church

The mortgage would be £410k :eek: on a property conservatively valued at £500k - well, that was his value when he wanted to buy me out, anyway :rolleyes:

Just give me some things to consider please .....

toonfish

the mortgage is obviously interest only, and how will you fare if rates increase/house prices fall?

personally I would say you're over-committing but you can only decide for yourself.

hedgehogpenguin

I have a mortgage repayments for around 50% of my income, and am not very frugal. It is quite manageable for me, although I might be quite poor for the last few days of every month. I also have maybe 10K savings in case of emergency, but keep them well out of my reach so I can't spend them on a whim!!

Dozey_Mare_2

Given that I have approx £2k in addition to the mortgage and the bills - and I have my "rainy day" savings - I'm not too concerned about interest rate rises.

Yes - It's IO initially. But I intend to save £1k a month and then overpay at the end of years 1 & 2 .... and then probably go onto repayment.

The location is desirable .... very. I don't want it for an investment and want to be here for the foreseeable future .... at least 5-10 years ....?

My partner is not even speaking to me at the moment, so I have a few months to make my mind up. And he may not even agree to me buying him out :eek:

So much to cope with ....... You're right about the commitment, but I spend no money. My savings are current quite modest as I've only been working part-time, but my new income is that for the full-time position and I can see immense potential with my new purchasing power.

Ho hum ...... keep em coming folks

Running_Horse

Have you considered a lodger?

Something like £80 pw tax free income.

ruggedtoast

Hmm, only £4,400 a month to get by on. You're right to be concerned about money, its gonna be tough. Maybe you should see if you can get housing benefit.

PasturesNew

Dozey_Mare wrote: »

My net income is £4,400 and the repayments would be £2,050 per month.

Other bills would come to about £600 per month.
... I am relatively frugal

Many/MOST people (including me) have less than £2200 to start with. BEFORE any mortgage.

So it's easily manageable.

However, with bills of £600, that doesn't sound very frugal to me! That is how much I have entirely to live on (bills + life) after my rent's paid.

Good luck.

Mozette

Dozey Mare - You are best placed to know what you can afford. If I were you I would keep a spending diary for a while, just to be sure where the money goes, and if there is anything obvious that you can cut back on to help with the overpayments. I'm in a situation similar to what you're contemplating, it is a bit of a push sometimes, but for me it was absolutely worth it to keep a house that really suits me, and not to have the stress of moving again.
Good luck with it.

Dozey_Mare_2

I'm sorry that those who earn less feel somewhat jealous.

Everything is relative and everyone can be moneysaving, whatever their income.

If mortgage repayments are half your net income it doesn't matter whether you earn £1,000 a month or £100,000 a month. You still need to consider where you're spending and whether your budget is realistic.

Perhaps spend less energy being jealous and divert it into improving your lot - or simply being grateful for what you do have

Dozey_Mare_2

Running_Horse wrote: »

Have you considered a lodger?

Something like £80 pw tax free income.

Thanks for this. I am thinking about it. I'm having a "mid-life crisis" at the moment so not sure if lodgers could put up with me! :rolleyes:

Also, as a relatively rural village the choice might be somewhat limited ... but I do know of someone who might be interested.

I'll need to think about it as I have a tendency to "jump right in" and then regret it later! :eek: But it's worth more thought - thanks :T

General_Mayhem

You should be fine. Yes it is a large proportion of your income, but your "disposable" income will still be more than most people's.

Just bear in mind that you won't be able to maintain the normal expenditure of someone who earns 4,400 a month. Are you prepared to make that sacrifice to keep your home? (I would be!)

If you think you can save 1000 a month on top of the mortagage interest, and are prepared to sit out any drop in house prices, then you'll be fine. I would say you should go for a fixed rate mortgage for a long period: if interest rates doubled, then you would be in trouble. This may mean you pay more, but that is the cost of security.

This is all my opinion, and only you can really decide if you should take this on.