1 Million Pound House - Could we do it?....

sparky.shark

My whole family is talking about an idea to move into a much bigger home from the one we currently live in.

What would we need to take into account if we were to look for a 1 Million pound house & most importantly could we afford it?

Yearly Income would include (joint Salaries) of 140K Gross.
A deposit of nearly 200K

Our current home has no mortgage and we would probably rent this out / rather than sell it to help fund the new home.

I know I could just use a mortgage calculator, however I was hoping for some advice and some insight as to whether it would be realistically possible. Are there any other angles I could approach this situation from.

Comments appreciated.

neverdespairgirl

Ignoring the current house you own for a second, I can't see how you could afford a million pound house. You've need an £800k mortgage, which is a very big multiple of your £140k joint income. That would be interest-only of £52,000 a year, or £1,000 a week, which would be more than half of your take-home pay, I think? Plus there would be higher bills, council tax, repairs, etc.

The only people I know who have recently spent over £1m on a house have an income in the region of £1m a year, which is a rather different kettle of fish!

While rental income from your existing house might help, there might be voids between tenants, tenants who don't pay and take months to get evicted, etc.

Generali

sparky.shark wrote: »

My whole family is talking about an idea to move into a much bigger home from the one we currently live in.

What would we need to take into account if we were to look for a 1 Million pound house & most importantly could we afford it?

Yearly Income would include (joint Salaries) of 140K Gross.
A deposit of nearly 200K

Our current home has no mortgage and we would probably rent this out / rather than sell it to help fund the new home.

I know I could just use a mortgage calculator, however I was hoping for some advice and some insight as to whether it would be realistically possible. Are there any other angles I could approach this situation from.

Comments appreciated.

Not sure if this is entirely serious or not but here goes.

Stamp on buying would be huge (3%=30k not sure what the rate is?) and your interest payments alone would be in excess of half your net income if you could find someone to lend you over 5xgross salary. If one of you lost their job you'd be in the brown stuff quickly.

I'm trying to find something positive to say but struggling. Good luck if you decide to do it.

Is this a wind up? I just finished a 16 hour day so my antennae are all off.

sparky.shark

100% Serious.

Family has been talking about it for a while, but I’m the one who’s being cautious and not jumping into something that may end up being a catastrophic decision.

Hence the post.

PS: Get some sleep.

silvercar

Only you know how much income you have left over each month. On that sort of income it should be possible, depending on lifestyle, to have quite a bit of spare income. So 5 x income mortgage multiple is easier on high incomes than lower.

The other consideration is that a lot of mortgage lenders have maximum amounts of 400-500k. That said, with an excellent credit rating, I doubt you would have a problem finding a lender.

lynzpower

hang on - are you in danger of thinking around this the wrong way.

Surely you need an unusual property, one that would provide not only the right amount of space, but also the privacy for extended family members, along with all the usual stuff ( location etc) that we all have when choosing a home.

Wheres 1million cme from. A figure out of the air? or is a house big enough for all of you in the area you want roughly about a mil?

Could you not move somewhere cheaper, it doesnt seem like you would be able to afford it.

Generali

sparky.shark wrote: »

100% Serious.

Family has been talking about it for a while, but I’m the one who’s being cautious and not jumping into something that may end up being a catastrophic decision.

Hence the post.

PS: Get some sleep.

I reckon it's madness quite honestly. You're on good money and if you invest it wisely then you may well end up in the million quid place. £50k a year saved will mount up quickly. As they say, look after the thousands and the millions will look after themselves.

PS 16 hours isn't that much more than normal right now. I think my befuddled state might have as much to do with the duck the boss and I split at 9pm!

sparky.shark

There is no way we could afford a property that would accommodate all of us in the area we currently live. We have had to search further out.

Basically looked at one of the home selling internet sites and put in my requirements, 6+ beds etc and it came back with the Million pound and obviously much higher.

Looking at the specs without actually viewing anything it would probably be adequate with spare room so that members don’t knock into each other!

As for investments, it’s spread over multiple savings accounts. So the standard 6% rate. It would take ages for us to raise the capital then plunge into a purchase, by then we would probably have to go our own ways & even that is looking like an expensive option.

PS: Whats everyone doing up so late....

jamesd

Well, I'm taking a brief break from work, since I usually work evenings and nights.

Is this mortgage going to be repaid out of a single income or a couple's or is it from the combined incomes of five or six different couples?

Investment in unit trusts and OEICs is the way to actually make the money to do this sort of thing. Bank accounts won't do the job - the interest rates are two low, half of the long term returns from the UK equities markets.

Step one might be to try to save an additional 100k in the next twelve months while the property market does whatever falling or standing still it'll do. That'll possibly reduce the price of your desired property as well as improve your ability to pay.

Or go with renting for a year or two while the property market sorts itself out. That'll probably get you a larger property at lower cost and you'll be able to prove that you can handle the cost.

sparky.shark

Can't argue with spending quality time at work

It’s from combined incomes mainly myself, & two brothers.

The market is looking suspect at the moment as you say with so much publicity about prices. It may be good to hang on as you say. Though people, rightly or wrongly are just too greedy in my opinion.

I have been told investments are risky and I got seriously burnt with playing with the stock market sometime back and am vary of these things... Plus the money has kind of been waiting in the Savings accounts just in case we were to buy something.

I for one am really tired and will go to bed. Night all.

dipsy

errr I am up late reading this thread... why don't you buy a whole load of houses in same area/development and just have a get to gether once a week..


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