Thoughts on budget? Potentially buying alone, how do you manage?

Singlemummy_2

blue.peter said:

theoretica said:

Life insurance is for other people after you die

It's a long time since I last took out a mortgage, but the lender made it a condition that I had life insurance. That used to be a pretty much universal requirement. Is that no longer the case?

Pretty sure it’s a requirement on my application too, it certainly was on my previous one 

RWinter1993

theoretica said:

Looking from the other side, with your income the most a bank might lend you on a 25 year mortgage would have a repayment of about 900 - which would eat into your fun money but some people would choose to do it.  I guess it matters what you think of the properties available at different prices.

Where in your career are you relative to likely payrises?  Would you be looking at a similar budget long term or one which gets easier over time?

Very true about the maximum I could borrow but I don't want to be stuck at home being unable to afford to do anything 

No more significant payrises for another 3 years, when I do that will be roughly another 200 a month which im sure will have been eaten up by bill rises by then. Thats what you get for working in the nhs...

RWinter1993

TheBanker said:

I think your energy figures are too low. If you've based them on what someone else pays, remember we've just had six months if government bill credits, and we're still benefiting from the price guarantee. Obviously actual bills will depend on the property, your lifestyle and your willingness to use jumpers and blankets instead of central heating.

You have car insurance and petrol but not repairs. And you've got cat worming but not vets bills. If something goes wrong before you've built up savings, you're going to be stretched. 

True, im looking at small two beds and ideally a semi-recent build if I can. Not looking at any EPCs below a D 

Yes lack of emergency fund is my worry too! Im used to having 2k that I can dip in and out off as needed and im saving a lot each month at the moment, only saving £100 a month feels low in comparison

RWinter1993

Singlemummy_2 said:

I’m in process of buying and if it helps the mortgage rate is 4,9% and repayments are around £740 on circa £132k mortgage (applied and got offered in January)

Do you have a deposit to purchase or do you need to save that? Have you accounted for additional costs of purchasing (solicitor fees / survey etc etc)

for my household budget I ’ve budgeted £240 for gas/elec and £20 home insurance 

you will need probably need life insurance - 
do you need a Tv license as you need to add that in too.

your costs will possibly be more than paying in a shared house because there’s only one person (you) paying the bills - depends on the property you buy

best thing I did was get a broker (I paid one) to understand exactly what I could afford. She actually encouraged me to pay off debt which significantly decreased my deposit but did increase my borrowing ability. 

I have a healthy deposit and 3k put aside on top for fees that I'll keep adding to

Looks like I need a rethink on my bills budget then

Not going to worry with a TV licence as I don't watch bbc. I haven't thought about netflix though, might see if I can share with my dad but I know they are cutting down on that. I can also get free disney+ with club lloyds at the moment. Im on my own with no dependents and a good sickness policy at work so I was hoping to skip life insurance

Yes I'm planning to see a broker at the end of the month to see if I can get any better deals

TheBanker

Life Insurance is a condition of some lenders, but not all. I don't have any (mortgage with Nationwide). I don't need any as I have no financial dependents. What I do have is Income Protection and Critical Illness insurance - the lack of dependents means I'd be in serious trouble if I couldn't work. The policies kick in after my employer's (generous) sick pay stops. 

It's certainly something to consider. Many mortgage brokers can advise on this so it's worth asking. 

RWinter1993

gwynlas said:

By buying a suitable property you could factor in renting a room. I knew someone who with a seperate kitchen set up living room and bedroom as bedsits and used one whilst renting the second with shared use of kitchen and bathroom. There must be call for such  with hospital staff even if you only let it occasionally.

I was considering this but a lot of two beds around here appear to have a box room as the second bedroom which i dont think would be very appealing. Plus having lived in househares for 10+years I'm really not keen to again for my own sanity. If times get really bad though I might need to consider it

RWinter1993

Kerreh said:

Jealous of your council tax Mine's £107 (Band A with 25% sole occupancy discount)!

I live in a 1 bed ground floor flat and hot showers are my splurge - water is £14p/m metered for me so your water (imo) looks about right... 
As others have said your gas/electric needs increasing - currently paying £105p/m and my flat is tiny - so you really will need to increase that
Have you factored in health? eg. dentist, opticians, any prescriptions? even just a few pounds a month for when the annual/bi-annual appointments occur

Yes I'm very lucky with the council tax! 

Thank you, i'll have a budget rejig. I havent but thats a good point, not that I seem to find a dentist willing to take new patients locally at all!

RWinter1993

Cisco001 said:

If you live on your own and don't play online game. Skip the broadband, get a unlimited data plan on mobile and hotspot it. (provided you don't use a expensive phone)

I am a bit of an online gamer unfortunately, plus I stream anything I watch but that would be a great idea otherwise

RWinter1993

Singlemummy_2 said:

theoretica said:

Singlemummy_2 said:
you will need probably need life insurance - 

Life insurance is for other people after you die - if you don't have children or a partner you probably don't need it. I certainly wasn't going to get it to make my mortgage lender's life easier.  But income protection of some sort might be worth considering.

Yes my lender wants this and which is why I mentioned it as the OP may not consider that the lender may request it but why would I want to leave a mortgage for my children to have to deal with should something happen to me.  They are currently under 18 and under 10 and i’m a single parent so yes it’s an expense I value 

Thats going to be so irritating if its mandatory! I totally understand the importance in your situation or if I was buying with someone. Realistically if anything did happen my parents wpuld just sell up, I live in a different county so it wouldnt be worth them keeping it

RWinter1993

Updated budget- based on a 5 week month so some months I might have surplus to hopefully top up my savings

Salary: £2130 take home a month 

£78 council tax (band B 25% discount)
£200 gas/electric (estimate)
£20 water (estimate)
£14 home insurance (estimate)
£37 internet (estimate)
£4.50 cat worming treatment
£10 mobile phone
£25 mandatory work fees
£8.17 mandatory work fees
£100 savings
£100 towards car mot/insurance
£10 presents/gifts
£200 food
£150 petrol
£18 haircut 
£5 dentist/optician 
£7 netflix?
£350 fun money for meals out, cinema, clothes, hobbies e.t.c (£70 a week)

=1336.67 

Looks like increasing bills and cutting the 'fun' fund gives me a similar figure that I would still round-up to £1400 a month to hopefully give some breathing room

Im going to stick to a stricter budget the next month or so and see if the fun fund is realistic

Playing with figures again today on a calculator I could borrow 150k for £725 a month repayment at 4.10% which would mean a budget of 215k for a house and leave me with 5k left over for an emergency fund which feels much less stressful 

Might be just about doable as long as house prices stay stable...