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

EssexHebridean

BobT36 said:

I've not had a holiday (besides a short weekend stay in the Lake district, mostly funded by Virgin vouchers obtained from a bank switch) in over 10 years. Because I've been saving for a house. 
A secure, comfortable roof over my head at a good price is far more important than whimsical trips away. I can do the latter once I've secured the important stuff, like a house (as it's not getting any easier, or cheaper). 

But everyone has their own priorities. However with prices like these, one would do well to look ahead. Life is indeed for living but unless your finances are amazing, you may end up living that life in rented forever.

But the other perspective on that is that you could drop down dead tomorrow, or be diagnosed with an illness which means that those holidays, days out, fun times you’ve postponed altogether while you are saving are no longer within your reach. We always advise people on the DFW board that in other than the most extreme circumstances people should be budgeting for entertainment in some form or another - as it’s the small things like that which make a big difference to the sustainability of long-term debt clearance. It’s just as true in saving for a house, or indeed working at clearing a mortgage early once you have one. Balance. 

RHemmings

MobileSaver said:

RHemmings said:

user1977 said:

RHemmings said:

EssexHebridean said:

On the risk of negative equity though - ultimately a period of negative equity is only a problem if you need to/want to sell. It's going to be an uncomfortable situation for sure, but as long as you can ride it out, then things should balance again in most circumstances. 

What about if they need to or want to remortgage? 

"Needing" to remortgage isn't a situation which ought to arise - that's the reason for the "stress tests".

There are a lot of people who are now experiencing difficulties because they fixed at very low interest rates and are coming to the end of their fixes.

There will always be a small minority who make bad decisions and/or just have really bad luck but the vast majority of new mortgages are fixed for at least two years and most are actually fixed for five years or more so the number of people who might find themselves in negative equity after five years is going to be tiny.

By experiencing difficulties I didn't just mean that people would be in negative equity, but include those who find it difficult to afford their mortgage given current interest rates. The low interest rates have been ongoing since 2008 or so, and hence there are going to be people reaching the end of five-year fixes all the time, and it will be years before that stops. Even then, there will be people who have remortgaged since interest rates have risen but are still in difficulty because they took out mortgages at a time when rates were low, and have struggled since their first remortgage. 

If buying with affordability based on the historically low interest rates was a bad decision, then I would say there are a lot of people who made that bad decision. And, it will still be years before that issue is out of the system as we're beyond the era where people who took on mortgages at much lower rates are emerging from their fixes. 

littlemissbliss

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. 

I would say you are not in the position. To many people are over stretching themselves and then expect government help later on which has other knock on effects. I would suggest maybe looking for something a little cheaper in a different location. 

I understand how tempting it can be to spend, but if you are saving for a property, cars and holidays need to go out the window if you don't have the money. I am a single person earning 54k pa with a deposit nearly matching yours and even i am careful...I am going for a 2 bed flat. I understand the situations may differ however i am sure you can get a cheaper property then that. 

markin

MobileSaver said:

RHemmings said:

user1977 said:

RHemmings said:

EssexHebridean said:

On the risk of negative equity though - ultimately a period of negative equity is only a problem if you need to/want to sell. It's going to be an uncomfortable situation for sure, but as long as you can ride it out, then things should balance again in most circumstances. 

What about if they need to or want to remortgage? 

"Needing" to remortgage isn't a situation which ought to arise - that's the reason for the "stress tests".

There are a lot of people who are now experiencing difficulties because they fixed at very low interest rates and are coming to the end of their fixes.

There will always be a small minority who make bad decisions and/or just have really bad luck but the vast majority of new mortgages are fixed for at least two years and most are actually fixed for five years or more so the number of people who might find themselves in negative equity after five years is going to be tiny.

It was reported that the is a town down 50% yesterday.


I will always remember the thread were someone lost the house because they pre-ordered the sofa! and that was some years ago in the good times, The was one person this month furious that British Gas had incorrectly trashed a credit score and they lost the house they wanted.

RHemmings

littlemissbliss 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. 

I would say you are not in the position. To many people are over stretching themselves and then expect government help later on which has other knock on effects. I would suggest maybe looking for something a little cheaper in a different location. 

I understand how tempting it can be to spend, but if you are saving for a property, cars and holidays need to go out the window if you don't have the money. I am a single person earning 54k pa with a deposit nearly matching yours and even i am careful...I am going for a 2 bed flat. I understand the situations may differ however i am sure you can get a cheaper property then that. 

I am reading of multiple people who say not to take holidays or take minimal holidays when saving for a house. As an older person, I am saddened to read of younger people having to make such compromises to get onto the property ladder. I'm not saying that people shouldn't have to save that hard, because you have to live in the real world, not an idealised world. But, I'm sad to see all these comments. 

horsewithnoname

RHemmings said:

littlemissbliss 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. 

I would say you are not in the position. To many people are over stretching themselves and then expect government help later on which has other knock on effects. I would suggest maybe looking for something a little cheaper in a different location. 

I understand how tempting it can be to spend, but if you are saving for a property, cars and holidays need to go out the window if you don't have the money. I am a single person earning 54k pa with a deposit nearly matching yours and even i am careful...I am going for a 2 bed flat. I understand the situations may differ however i am sure you can get a cheaper property then that. 

I am reading of multiple people who say not to take holidays or take minimal holidays when saving for a house. As an older person, I am saddened to read of younger people having to make such compromises to get onto hhe property ladder. I'm not saying that people shouldn't have to save that hard, because you have to live in the real world, not an idealised world. But, I'm sad to see all these comments. 

Me too, 40 ish years ago I managed to buy a house, have lots of fab holidays go to the theatre, gigs have nights out etc. But then a 3 bed semi in a decent are cost me £50,000, but there are still those who think house price inflation is a good thing 🤦‍♂️

MobileSaver

horsewithnoname said:

RHemmings said:

littlemissbliss said:

bigolsausage said:

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. 

I understand how tempting it can be to spend, but if you are saving for a property, cars and holidays need to go out the window if you don't have the money. I am a single person earning 54k pa with a deposit nearly matching yours and even i am careful...I am going for a 2 bed flat. I understand the situations may differ however i am sure you can get a cheaper property then that. 

I am reading of multiple people who say not to take holidays or take minimal holidays when saving for a house. As an older person, I am saddened to read of younger people having to make such compromises to get onto hhe property ladder. I'm not saying that people shouldn't have to save that hard, because you have to live in the real world, not an idealised world. But, I'm sad to see all these comments. 

Me too, 40 ish years ago I managed to buy a house, have lots of fab holidays go to the theatre, gigs have nights out etc. But then a 3 bed semi in a decent are cost me £50,000, but there are still those who think house price inflation is a good thing

I bought my first house 30-ish years ago and my experience couldn't have been more different to yours; we absolutely had to scrimp and save and thoughts of a holiday were a pipe-dream. A lasting memory is that a luxury treat for the weekend was (quite genuinely) a four-pack of lager! FTBs having to make sacrifices and compromises is not remotely a new or recent thing.

The house we bought was also very basic; no central heating, no double glazing, no proper kitchen (we lived with just a second-hand microwave for the first year because we couldn't afford a proper oven) and no parking. 

Most FTBs wouldn't dream of buying such a property today and far too many want a brand spanking new new-build with shiny new appliances then in the same breath complain about how much more expensive property is than in their parent's day... you couldn't make it up.

horsewithnoname

MobileSaver said:

horsewithnoname said:

RHemmings said:

littlemissbliss said:

bigolsausage said:

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. 

I understand how tempting it can be to spend, but if you are saving for a property, cars and holidays need to go out the window if you don't have the money. I am a single person earning 54k pa with a deposit nearly matching yours and even i am careful...I am going for a 2 bed flat. I understand the situations may differ however i am sure you can get a cheaper property then that. 

I am reading of multiple people who say not to take holidays or take minimal holidays when saving for a house. As an older person, I am saddened to read of younger people having to make such compromises to get onto hhe property ladder. I'm not saying that people shouldn't have to save that hard, because you have to live in the real world, not an idealised world. But, I'm sad to see all these comments. 

Me too, 40 ish years ago I managed to buy a house, have lots of fab holidays go to the theatre, gigs have nights out etc. But then a 3 bed semi in a decent are cost me £50,000, but there are still those who think house price inflation is a good thing

I bought my first house 30-ish years ago and my experience couldn't have been more different to yours; we absolutely had to scrimp and save and thoughts of a holiday were a pipe-dream. A lasting memory is that a luxury treat for the weekend was (quite genuinely) a four-pack of lager! FTBs having to make sacrifices and compromises is not remotely a new or recent thing.

The house we bought was also very basic; no central heating, no double glazing, no proper kitchen (we lived with just a second-hand microwave for the first year because we couldn't afford a proper oven) and no parking. 

Most FTBs wouldn't dream of buying such a property today and far too many want a brand spanking new new-build with shiny new appliances then in the same breath complain about how much more expensive property is than in their parent's day... you couldn't make it up.

I did a lot of work on my house, but I could afford to because I wasn’t paying an enormous mortgage. I couldn’t afford the rent my current home would command, thankfully I own it outright. 

I know a lot of FTBs - my friends’ kids - who would be glad to be able to afford a home that they could do up - not everyone wants brand new. 

I wouldn’t swap to being a FTB now  - would you?

MobileSaver

horsewithnoname said:

MobileSaver said:

horsewithnoname said:

RHemmings said:

littlemissbliss said:

bigolsausage said:

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. 

I understand how tempting it can be to spend, but if you are saving for a property, cars and holidays need to go out the window if you don't have the money. I am a single person earning 54k pa with a deposit nearly matching yours and even i am careful...I am going for a 2 bed flat. I understand the situations may differ however i am sure you can get a cheaper property then that. 

I am reading of multiple people who say not to take holidays or take minimal holidays when saving for a house. As an older person, I am saddened to read of younger people having to make such compromises to get onto hhe property ladder. I'm not saying that people shouldn't have to save that hard, because you have to live in the real world, not an idealised world. But, I'm sad to see all these comments. 

Me too, 40 ish years ago I managed to buy a house, have lots of fab holidays go to the theatre, gigs have nights out etc. But then a 3 bed semi in a decent are cost me £50,000, but there are still those who think house price inflation is a good thing

I bought my first house 30-ish years ago and my experience couldn't have been more different to yours; we absolutely had to scrimp and save and thoughts of a holiday were a pipe-dream. A lasting memory is that a luxury treat for the weekend was (quite genuinely) a four-pack of lager! FTBs having to make sacrifices and compromises is not remotely a new or recent thing.

The house we bought was also very basic; no central heating, no double glazing, no proper kitchen (we lived with just a second-hand microwave for the first year because we couldn't afford a proper oven) and no parking. 

Most FTBs wouldn't dream of buying such a property today and far too many want a brand spanking new new-build with shiny new appliances then in the same breath complain about how much more expensive property is than in their parent's day... you couldn't make it up.

I did a lot of work on my house, but I could afford to because I wasn’t paying an enormous mortgage. I couldn’t afford the rent my current home would command, thankfully I own it outright. 

I wouldn’t swap to being a FTB now  - would you?

I bought ten years after you and paid almost double (£90k from memory) for a 2 bed mid-terrace compared to your £50k for a 3 bed semi-detached. My mortgage seemed huge relative to my earnings and again from memory interest rates were around 10%; we rarely had spare cash and I had no choice but to learn how to do things myself as there was no way we could afford to pay someone else to do it.

There was no internet with the world's information at your finger tips; when looking for a home we literally had to drive around all the local towns visiting estate agents and picking up each town's local papers for the property section. Similarly I had to borrow books from the library to work out how to do some plumbing in the house, not just click a button and get instant answers with pictures and video.

Every little thing we wanted involved driving out to shops and hoping it was in stock; comparing prices and ordering online with next day delivery simply didn't exist. There were effectively only six days in a week back then, all the shops were closed on a Sunday so popping out to get something for a little DIY at the weekend was simply not possible.

Mobile phones didn't exist; once you left the house no-one had any way of contacting you and if you wanted to contact someone you had to pull over, find a payphone to call them and hope that they were at home or work. For entertainment we had initially three and then four channels to choose from on the TV.

This idea that the older generation had life so easy and so good is pure fantasy and ignores the myriad of positive advances that we all take for granted these days. 

Would I give up all today's benefits just so I could buy a FTB house at 1990 prices? Not in a million years.

RHemmings

I'm in the older generation and in many ways I had it much easier than young people nowadays. If I had bought a house in my 30s as is typical even now it would have been even easier. 

That information is much easier to find nowadays in no way compensates for the fact that houses are much less affordable than they were way back when. And that's even before things such as education no longer being free, so young people often have student loans etc.