What Can We Afford?

matador04

Hello

1st post, so apologies if this is in the wrong place.

My partner and I are currently renting but are looking to get a mortgage asap. She is worryingly blas! about everything, saying we'll be able to afford anything we want. In truth, she is one of those people who doesn't like thinking about the value of money, whereas I am the opposite (purely because I was an idiot when I was a teengager and got into a lot of debt).

Our circumstances are:

My average monthly income after tax: £1,800
Her monthly income after tax: £800

I have a loan of £2,500 which I pay off at around £90 per month. She has a loan of about £1,000 outstanding, but it's with her grandparents so it's quite flexible.

My main problem is savings, or the lack of. I've got £3,500 saved for definite, but there's not much else.

How would you rate our situation? We've looked at a couple of properties at around £100k, but she's got her eyes on some nicer ones at around £120k. I have absolutely no idea whether we could afford that.

Any ideas on what we'd be able to safely borrow? Also, could somebody give me some info on how much the extra costs of buying are (surveys, solicitors etc.)? I am horribly ignorant.

Thanks in advance

Matador

herbiesjp

What are your gross annual salaries?

Dick_here

Afternoon matador !

matador04

herbiesjp wrote: »

What are your gross annual salaries?

Mine is £21k basic with minimum of £100 commission p/m, plus self employed income of around £200.

Hers is about £11k (she needs a new job).

herbiesjp

Thanks.

And how much do you think you would feel comfortable going out in mortgage payments each month?

matador04

!!!!!!_here wrote: »

Afternoon matador !

Are you who I think you are, !!!!!!? The !!!!!! from the other place?

Dick_here

matador04 wrote: »

Are you who I think you are, !!!!!!? The !!!!!! from the other place?

I am if you are.

I'll keep out of this one if you prefer though.

matador04

herbiesjp wrote: »

Thanks.

And how much do you think you would feel comfortable going out in mortgage payments each month?

Well, I'd like to keep it around the £600-£650 mark but I think we could probably afford more.

It's quite hard to judge, because I pay for literally everything at the moment (rent, council tax, bills...) which is a strain on the coffers. However, if we utilized her cash as well we could probably stretch a bit further.

matador04

!!!!!!_here wrote: »

I am if you are.

I'll keep out of this one if you prefer though.

No, the more the merrier. Get stuck in.

It's a small world.

Dick_here

matador04 wrote: »

Well, I'd like to keep it around the £600-£650 mark but I think we could probably afford more.

To give you an idea financially then, we're paying £700+ at present for a 118k loan. The OH doesn't earn much and I pay quite a bit in child maintenance too. We manage, but there's not much left over each month.

herbiesjp

matador04 wrote: »

Well, I'd like to keep it around the £600-£650 mark but I think we could probably afford more.

It's quite hard to judge, because I pay for literally everything at the moment (rent, council tax, bills...) which is a strain on the coffers. However, if we utilized her cash as well we could probably stretch a bit further.

Going on the savings you have, you will be looking at 100% mortgages, as the savings will go to cover other associated purchase costs as opposed to be used as a deposit.

If you took an average 100% mortgage deal of say 6.60% over 25 years that would equate to £750 pm (based on £110k mortgage - so half way between what you and OH are looking at)

Over 30 years that would come to just over £700 pm

However to look at these 100% mortgages, in the current climate, you will need a squeaky clean credit history, so I would suggest getting your up to date credit files from Equifax or Experian in order to make sure there are no surprises on there