Only 4 times salary for mortgage?

MORPH3US

Op,

where are you looking to buy?

is it just you or do you have a family or o/h

MoneyInstigator

Thanks all for the detailed posts. Really gets me thinking. Much appreciated.

MORPH3US wrote: »

Op,

where are you looking to buy?

is it just you or do you have a family or o/h

I am looking to buy in London. I have no family at present. I do intend to buy a 2-bedroom house and until I have kids rent one of the rooms out which would give approx £4500 income.

I understand my forecasting does not take into consideration ALL the possible financial problems but after 2 years if I do get married that would be a second income which would mean an extra salary and a better standard of living.

MoneyInstigator

PasturesNew wrote: »

On the other hand £900 goes a long way. I pay my rent and bills and run a car and have a whole life on this and less.

It's down to lifestyle, but £900 is a lot still if you count every penny and make every penny count.

Bills might come to £250/month, so if you can run the rest of your life (car, socialising, travel, holidays, gifts, stuff, etc) on £600/month (£20/day) then you'd be fine.

If, however, you like to hit the town a couple of times a week, only ever wear designer clothes, won't cut back on holidays/breaks and have a penchant for buying things you don't need, then you would be in trouble no matter what salary you get.

Owning a home often leads to you suddenly spotting all these great things that you think'd look fantastic in your home From cushions to kitchen gadgets... all manner of cr4p you don't need.

Yep you're right. I'm not a big spender. I don't have too many outgoings. But do like to save up for a holiday every 6 months. But yes I probably didn't take into consideration things like buying furniture and other bits and bobs for the house.

MoneyInstigator

pinkshoes wrote: »

And if interest rates go up to 10% (they have before!), that'll be £1560 a month... then £100 for council tax, £60 for bills (gas, elec, water), £200 for food/groceries etc... That comes to over £1900 already not including other expenses like having a life and running a car!

I would be more concerned that on a £35k salary you have only saved up an £8k deposit, which implies you like spending money, and would have to make a lifestyle change to afford a house.

Try saving up at least a 10% deposit.

People used to wait until they got married to buy a house, but now people seem to think it's their right to be able to afford a house on their own. Why not wait until you have a partner,and you BOTH have £35k salaries, so could easily afford a small house!?

I'm not convinced houses will drop in price much, and more or a stagnation in popular areas, so don't presume they will drop.

Good points. But that 10% rise would not be instant it would take a few years, by that time my own income would have increased and I probably would be married = extra salary.

I do understand it's much easier to buy a house as a couple. But while I am not married I would like to see my money go towards an investment and a house is probably the best investment in my eyes.

VFR-Rider

Hi OP,
You're situation is startlingly similar to mine! Little bit younger, little bit lower salary/ deposit.
I know exactly what you mean about thinking you can afford a higher mortgage... however I have not run a house before so I'm not sure of the costs.

Currently I'm saving just over 1k a month to go to my deposit on top of my rent (private in London so not that cheap!) but I'm also annoyingly aware that since I've decided I want to buy that the process is not immediate.

As others have said, the best way forward is to save a better deposit, currently I'm getting some proposals to find out what sort of property value I should be looking at as well as continuing to save. I have targeted a 20k deposit when my lease is up for renewal (in October) to decide if I should rent another year or not... why not just save as much as you can and just keep looking.
:money:

MoneyInstigator

VFR-Rider wrote: »

Hi OP,
You're situation is startlingly similar to mine! Little bit younger, little bit lower salary/ deposit.
I know exactly what you mean about thinking you can afford a higher mortgage... however I have not run a house before so I'm not sure of the costs.

Currently I'm saving just over 1k a month to go to my deposit on top of my rent (private in London so not that cheap!) but I'm also annoyingly aware that since I've decided I want to buy that the process is not immediate.

As others have said, the best way forward is to save a better deposit, currently I'm getting some proposals to find out what sort of property value I should be looking at as well as continuing to save. I have targeted a 20k deposit when my lease is up for renewal (in October) to decide if I should rent another year or not... why not just save as much as you can and just keep looking.
:money:

Yes it is tempting but as you say you haven't run a house before and I haven't either. But then how hard can it really be.

I think waiting is the smart move but I would be regretting in 2-3 years time if house prices are much higher than now.

[Deleted User]

Its not that hard really.. lots of bills and stuff, but you get it all sorted in the end. It's just when things break you have problems (thankfully nothing has happened to me, but that's what insurance is for)

Sometimes you have disasters buying a house, like my OH's friends. They moved in, found the kitchen didn't have earthing on it's electrics, had to get it all replaced. In the process, they found asbestos, had to remove it. Finally, part of the roof collapsed in when it rained.

Now, if that was rented, the landlord would have to pay. Sadly, it's your problem once you buy.

When we bought last year, we replaced the carpet, repainted every room, filled in a serving hole between the kitchen and lounge, bought: new bed, bedroom furniture x 2, TV stand, TV, sofa, hoover, oven, microwave, fridge, freezer, toaster, cutlery, crockery, kettle.. plus lots more for the kitchen and bathroom.. for the garden, we needed a lawn mower.. I bought lots of tools as I wanted to put laminate flooring down. I think about 7-8 grand went into the contents of the house within 3 months BUT i had put aside money for these things.

EDIT: no one ever told me it would cost a grand to carpet a 2 bed terrace

So, key point is: you don't just buy a house and that's it.. there's a lot of instant expenses.

firsttimetom

Things have changed quite a bit on salary multiples.

I'm Younger than you, but have a larger deposit. A couple of mortgage advisors said I could get a mortgage of up to £250,000 about a year ago. Now business has flattened out (I work full time and run a business as well), I simply wouldnt be able to cover the repayments, let alone bills.

Its worth poiting out I didn't have any intention of buying, it was more of a theoretical 'What Could i afford scenario'.

guidomax

Re the original post:

I was in almost exactly the same situation as you. Similar salary and age, and I decided I needed to get on the ladder this time last year.

I paid 167k for the house (managed to get a mortgage - just!), with a deposit of approx 15k.

Looking at your figures, I'd recommend saving up at least a 10% deposit. The mortgage deals you'll get from having 10% are much more varied (and better!) than a 5% deposit.

Going from a rental payment of £300 a month up to a mortgage of approx 1k per month was a big jump. I was just as confident as you - thought I had more than enough 'disposable income' when I was renting to cover the extras, and broadly this is the case - I've not gone in to debt - but now my outgoings are only just covered by my salary.

I must echo the other posters' comments about the desire/need to buy things for the house once you have it. Up until I bought, I was living in shared houses; now I have my own place I found myself spending money on things I wouldn't have before. For example, I've bought a decent set of cookware - wouldn't have done this before cos living in a shared house, I knew it'd probably get trashed!

It seems like little things, but it all adds up. Fortunately the house was only built approx 10 years ago so it hasn't needed any structural work, but as a previous poster said, things like tools for DIY, furniture, pictures for the walls(!) and so on do add up to be rather pricey!

The bills, not being shared, also came as a bit of a shock. As a guide, I pay approx £100 per month in council tax, £40-odd in gas and electricity, £15 for water and sewerage, £25-ish for phone and broadband, £15 for buildings and contents (got a great deal!) then there's TV licence, and all sorts of little things. £200 a month covers all these charges (obviously, your council tax and usage of utilities will probably vary, but this is a good ballpark figure for me, in a 2-bedroom terraced 'starter home').

In summary, I'm glad I took the plunge, and wouldn't want in any way to discourage you from doing the same. However it has made me make sure I take care of every single pound I spend, so I've been following MSE a whole lot more!
If you're prepared to compromise your social life a bit, don't go out to the pub so much, cook at home instead of getting take-aways, and make clothes last a bit longer, then do it. Of course when you've got your own house, then staying in, getting your mates round and having a few cheap beers from the supermarket is just as fun as going out to the pub!

Best of luck in whatever you choose.