Just had an offer accepted on a house - our deposit is smaller than we thought. Panicking.

YoungBlueEyes

EssexHebridean said:

Oh - and never pin your hopes on an "expected" death - not wishing to be brutal, but sometimes the people you expect may die don't, or at least not in the timeframe that might reasonably be expected, and even if they do, there is never an absolute certainty that they will choose to leave their money where you expect that they might... Even if an inheritance should arrive, then take time to consider whether in that instance the person leaving the money to you would really have wanted it to be frittered away on day to day expenditure, or whether perhaps you'd feel it was more appropriate to their memory to use it for more notable things - a future upsize in housing perhaps, or some of it on a holiday-of-a-lifetime that you could never have dreamed of affording otherwise... 

This is basically what I was going to say. Just because they have £x doesn't mean you've got that much to come. There could be debts/Benidorm timeshares/dog's home ready to take big bites out of it. Please don't rely on this to get your spending back on an even keel. Spot on with the "timeframe" comment too - we were assured daddy was circling the drain, at most a month or two left. Well he lived a few years longer than that. You never can tell.  

EH has given really good advice, listen to her. 

user1977

YoungBlueEyes said:

EssexHebridean said:

Oh - and never pin your hopes on an "expected" death - not wishing to be brutal, but sometimes the people you expect may die don't, or at least not in the timeframe that might reasonably be expected, and even if they do, there is never an absolute certainty that they will choose to leave their money where you expect that they might... Even if an inheritance should arrive, then take time to consider whether in that instance the person leaving the money to you would really have wanted it to be frittered away on day to day expenditure, or whether perhaps you'd feel it was more appropriate to their memory to use it for more notable things - a future upsize in housing perhaps, or some of it on a holiday-of-a-lifetime that you could never have dreamed of affording otherwise... 

This is basically what I was going to say. Just because they have £x doesn't mean you've got that much to come. There could be debts/Benidorm timeshares/dog's home ready to take big bites out of it.

More commonly, a few years of nursing home fees will take a large chunk too.

bigolsausage

EssexHebridean said:

bigolsausage said:

We've just had our offer accepted on a house for £325k. We have a joint income of £68.5k. I thought we had a £50k deposit, 50% from me and 50% from my partner. 

I forgot that my partner spent £5k on paying off overdraft and buying a car (which we agreed he could), and the other £5k has just gone missing i.e. he's spent it without realising. He still has £11k for the deposit.

I'm incredibly mad at him, but I can also see he's disappointed in himself. He thought he'd put the money to the side with the other half and had money to spend but he didn't. He's annoyed and very remorseful. 

But this means we now have a deposit that's £10k less than we originally thought and now I'm not sure if we'll get a mortgage and if we can afford the house. 

I've run the numbers with a rough estimate of £1500 for mortgage and insurances, and we come out with £2000 after bills and food. But I'm just not sure if I'm missing anything or if I'm calculating it wrong. 

Just very worried that we now might not get the house. 

Would this be affordable on our income? What is a comfortable amount to spend on a mortgage for an income like this? 

We don't really have any debts, or spend a lot on fancy things. Our money disappears mainly on food/coffees/takeaways which we know we need to cut down - but aside from that, we're homebodies with cheap hobbies lol. 

The bits I've marked in bold contradict one another - while you may not have debts now, clearly, until a short time ago, your partner HAS had debt. The £5k just being frittered is a massive red flag as well - as it suggests that "spending money" isn't being budgeted, and that savings are routinely being dipped in to just for incidental spending - that's a problem. 

You clearly do have sufficient funds for a 10% deposit, but what about the other costs involved in the move? Do you have stamp duty to pay? Removal costs? There will be the solicitors fees and disbursements as well of course. Are you going to be needing to spend on additional furniture etc for the new house as well? I think you need to sit down and go back through ALL your finances, as a couple, before you proceed here if I'm honest - it just feels as though you've got to the "making an offer" stage without having really thought about and checked the nuts and bolts - and I say that as someone who has recently been through a house purchase - I checked the financials countless times from the very start of the process, including doing the MSE  budget planner sheet with various different scenarios of expenditure dependent on the level of property we bought and so the mortgage that we could afford. As for money "disappearing" on food/coffee/takeaways - if that spending will need to change once you have a mortgage then make that change now - and start learning to live with it as that will make life far easier later on. 

I'd suggest that the two of you sit down and put together a proper budget, and that should include a set amount of personal spending money each month, each. That personal spending money should be able to be used for whatever each party wishes, but should be on the basis that "when it's gone, it's gone" and ideally I'd suggest that each of you should be looking to make some savings from that where you can as well towards a personal savings pot that cane be used when something larger is wanted - new personal tech perhaps, or a weekend away with friends and without the other partner.  You also need to list out ALL your spending in relation to the move - including a bit over and above for contingencies - and then be informed by that whether in fact you are able to continue with the purchase of the house you've offered on now, or whether you need to step back a notch on pricing levels. 

You've had lots of good advice above on the specifics around affordability as well. 

I have £6k for stamp duty, legal fees. No removal costs as I can get that from work free. We have a house full of furniture already so can make do with what we have. White goods are included in purchase. 

We've spoken with a mortgage advisor and have been advised it's affordable for us - I'm not just pulling out numbers out my !!!!!! and guessing. I'm just worried about having more expensive outgoings than I've ever had. 

We have decided to cut back on spending now and not be so frivolous. We went from having no money and spending it all on rent to having disposable income as we moved to a more affordable area so have been enjoying not having to worry. We won't worry when we buy the house, but we will need to keep on top of things more. If only to save for a holiday rather than spending on random crap. 

I've done the MSE Budget Planner and over-egged a lot of the options just in case, still come out £1,300 in the green. 

bigolsausage

Herzlos said:

Can you sell anything to raise cash quickly? It'll be less for you to move, too.

Can you downgrade a car?

Also, are there any options for recouping money on some of the purchases - how much of the holiday is refundable?

I'd avoid taking out a loan until you actually need it, too.

If I downgrade my car, I will have no car. They're both cheap and reliable. We need them for work. 

We can sell furniture but won't get that much for it so not sure it would be worth doing... 

We aren't considering taking out a loan? Other than a mortgage lol. 

The holiday was for last year. It wasn't all spent in 2 months, it was over a longer period of time. 

bigolsausage

FlyMeSomewhere79 said:

Your budget is pretty much the same as my partner and I with enough left over for some savings - and travel in our case as it's a passion of ours. 

You should be fine as long as your partner is careful with his spending. I once had a first boyfriend that was bad with money and getting a mortgage with him was a nightmare and he sign up to things in my name because of his dire credit score which then ruined mine for a short time. I left him 21 years ago for my current partner who is brilliantly shrewd with money thank god.

Thank you. A lot of the comments here are really baffling. Is a 10% deposit THAT much of an issue when house prices are through the roof? I feel like some people here need a reality check. 

His spending has GREATLY improved since we met, and it wasn't even that bad. He's only ever had about £2k of debt at the most. This is all paid off, he saves money every month. He was mistaken in the fact that the deposit money was moved to another account (as some of it was) and thought it was all safe and protected. I'm not worried about him. He was HORRIFIED when he realised, I've never seen him like that. I thought he was going to cry. And I've never seen him cry before. 

I know that this is really a kick up the bum for him. We all make mistakes. 

bigolsausage

RHemmings said:

For £10K, is it possible to approach family/parents or friends? 

In the end I didn't need it, but I was thinking about what I would do if I ended up too close to the wire in terms of money on hand after buying. My plan was to get a £10K bank loan after purchase. So, I could run myself right down to zero on house purchase, and then get a £10K loan (I was going to put 'house improvements' down as the reason, and that would give me a buffer until finances improve. 

I was surprised how cheap the loan would have been - I've never had one before. It was going to be approximately £370 or so in total charges to repay the loan back over a year. 

Getting a £10K loan to put it towards the house price would mean that you would have to lie about the reason for the loan, which I would NOT advise doing. (In my case, the loan would have funded things I need to do to the house so only sort-of a lie). 

Risky if finances don't improve - and the OP's partner makes me worried about that as other posters are worried as well. 

We are seeing if we can get the £10k from his parents and give it back once we sell. It won't necessarily make much difference but will lower the interest rate by 0.2% so every little helps I guess. 

We don't take out loans, if we can help it. We've never even financed a car. 

bigolsausage

diego_94 said:

Go and see yourself a mortgage advisor, they may cost but for your situation to get you on the ladder, they will be worth their weight in gold. 

I'd be more worried how someone can spend £5k without realising! Not the most reliable person to be buying a house with.

£5k over a year and a half when you think you've moved your savings aside (that was the mistake, not the spending). He thought it was all moved to another account and it wasn't by accident. 

RHemmings

bigolsausage said:

RHemmings said:

For £10K, is it possible to approach family/parents or friends? 

In the end I didn't need it, but I was thinking about what I would do if I ended up too close to the wire in terms of money on hand after buying. My plan was to get a £10K bank loan after purchase. So, I could run myself right down to zero on house purchase, and then get a £10K loan (I was going to put 'house improvements' down as the reason, and that would give me a buffer until finances improve. 

I was surprised how cheap the loan would have been - I've never had one before. It was going to be approximately £370 or so in total charges to repay the loan back over a year. 

Getting a £10K loan to put it towards the house price would mean that you would have to lie about the reason for the loan, which I would NOT advise doing. (In my case, the loan would have funded things I need to do to the house so only sort-of a lie). 

Risky if finances don't improve - and the OP's partner makes me worried about that as other posters are worried as well. 

We are seeing if we can get the £10k from his parents and give it back once we sell. It won't necessarily make much difference but will lower the interest rate by 0.2% so every little helps I guess. 

We don't take out loans, if we can help it. We've never even financed a car. 

I've also never taken out a loan, so I can understand the reluctance. In my case, it was definitely a plan B or C. But, knowing the option was there allowed me to increase my budget over what I otherwise would have been comfortable with. 

If you borrow from parents then it's them that is taking the risk not you, and you can make sure that it's all paid back properly as per agreement so that everything comes up roses. The horror stories about lending to relatives are mainly when it doesn't get paid back, and you have control of that to make sure that nothing goes wrong. 

bigolsausage

YoungBlueEyes said:

EssexHebridean said:

Oh - and never pin your hopes on an "expected" death - not wishing to be brutal, but sometimes the people you expect may die don't, or at least not in the timeframe that might reasonably be expected, and even if they do, there is never an absolute certainty that they will choose to leave their money where you expect that they might... Even if an inheritance should arrive, then take time to consider whether in that instance the person leaving the money to you would really have wanted it to be frittered away on day to day expenditure, or whether perhaps you'd feel it was more appropriate to their memory to use it for more notable things - a future upsize in housing perhaps, or some of it on a holiday-of-a-lifetime that you could never have dreamed of affording otherwise... 

This is basically what I was going to say. Just because they have £x doesn't mean you've got that much to come. There could be debts/Benidorm timeshares/dog's home ready to take big bites out of it. Please don't rely on this to get your spending back on an even keel. Spot on with the "timeframe" comment too - we were assured daddy was circling the drain, at most a month or two left. Well he lived a few years longer than that. You never can tell.  

EH has given really good advice, listen to her. 

Ok well we know our families situation better than you do. We're not waiting for money, we're saying in the near future, we will definitely (confirmed) have something coming to us that will help should we need it. 

No one's wishing for their family members to die or spending an inheritance they don't have, just planning more long term. 

bigolsausage

eddddy said:

bigolsausage said:

We've just had our offer accepted on a house for £325k.

bigolsausage said:

Yes we have an AIP for £316,000 on the basis we had £50k deposit. 

Do you literally mean the offer has been accepted in the last day or so?

Typically, once your offer is accepted, the estate agent will ask to see proof of funds - AIP plus bank statements showing the deposit.  Is that what uncovered the problem?


So is there an immediate issue of convincing the estate agent that you have enough funds to buy the property?

(For example, if the estate agent isn't convinced, they might advise the seller to continue marketing the property.)

No there's no problem. We can still borrow the money, we still have enough deposit (just less than originally thought)

The problem is me and my panicking lol. 

Mortgage advisor has done a new AIP and it still works with the lower deposit. 

I'm just worried about everything.