Girlfriend Pregnant, little savings, currently renting. Mortgage a good idea?

schminky_pinky

Hi,

I've just joined, so apologies if this is not the correct place to post this! My girlfriend has recently found out she's pregnant, to our (unexpected) delight. We're obviously very happy but there's the pressing issue of where to live now facing us. We're currently renting at £550 a month (my salary is £18,375 and hers is £16,500) and I'm not sure which route to take! My lady is eligible for mateernity leave which pays 6 weeks at 90% of salary, then Statutory Maternity Pay of ~£112 per week

A mortgage on my salary alone would not be enough to buy somewhere decent, as we have no savings worthy of a deposit. I can get a mortgage without a HLC as I work for the Halifax, but I don't know whether it's competitive.

I guess my question is: Is it sensible to apply for a mortgage knowing that in ~7 months we'll have an extra family member and less income? The alternative is to rent again, probably somewhere a little cheaper. Either way we'll be saving as much as we can in the next few months to prepare for this.

Also worth noting, we each have unsec loans around £3000, I live in my £1500 overdraft and have a well-loved credit card!

Thanks for any advice any of you can offer. If this is an oft-discussed topic please let me know and I'll do a little more thorough research!

Chris

mcdelarich

My advice would be continue renting, clear your debts and try to save up.

My girlfriend planned on going back to work once she had our son but changed her mind once he was born so we've been living off my income for 21 months now. Maternity pay isn't much (and doesn't last forever unfortunately!) - and depends on how long you have been with employer etc.

Definately clear your debts and over draft first - and save up a deposit!!

Rich

RubyShoes

Is your partner planning to return to work once the baby has been born?

I'd be wary of getting a mortgage at your stage, unless you had a decent deposit... is there no one who would love to help you out with a deposit?

It also depends on what house prices are like in your area, and what type of house you are prepared to live in.

Just remember - factor in childcare costs into whatever you plan.

You can use www.entitledto.co.uk to see what you could get once the baby is born. However, don't rely on it. And tax credits are crap, even if it does appear you are entitled to more than the minimum, they are notorious for making overpayments, and generally getting things wrong.

But, congratulations on the pregnancy!! :j

margaretclare

Plans often do change once the baby is born, and intentions to go back to work often do change radically. Maternal instinct still exists, and once that kicks in, the prospect of leaving a new baby becomes increasingly unpalatable.

Rich's advice above is sound, and I agree.

HTH

Margaret

wissychraddle

Hi, I was faced with a simlar situation five years ago. I was 19, on £10500 a year and both myself and partner were living at home.

I signed up to a Housing Association and managed to buy a 50% share and rent the other 50%, it is called shared ownership. Just last year I have improved my salary and have managed to purchase the other 50% which they give to you at a reasonable price.

I must say that it was the best move of my life going 50 - 50.

Just a consideration for you as at least some of your hard earned money will be paying off a mortgage, but I do appreciate that at the moment everyone is, do you buy or don't you.

All the best with the little'un mate, best feeling in the world, then they grow up and start answering you back at 3 years old, my two are ganging up on me already, lol.

CJ

RoxieW

i'd also recommend shared ownership - we did it and its been great for us. pm me if you want anymore info on my experience of it. good luck

dannyboycey

Renting every time.

PasturesNew

Continue to rent. Why make your life harder. You will be able to rent a much nicer house than you can buy - and it won't cost you thousands up front.

A family should be about being together and enjoying their time together. Not about stress and turmoil and stretching yourself.

How would you feel if in 2 years' time your house was worth less than you bought it for, your gf had gone through post-natal depression and then never went back to work, a 2nd baby is on the way, the neighbours hate you and while you can find a better job with double pay it's 30 miles away and you can't move closer as you can't sell up and you can't afford to commute.

You could remove half that stress if you rented. And be paying only half the cost for your home.

In life there's one thing guaranteed: !!!!!! happens.... so you need to minimise the !!!!!! that could happen.

RENT.

morg_monster

Though on the other hand, what about the stress of finding a rental that is happy to have a baby there (ok probably do-able but may be extra deposit wanted etc). And also the possible stress of being told to move out with just a couple of month's notice and trying to find a new place to live with a baby in tow.
I think probably you should stay renting too - but remember the security of tenure you lack in a rental probably doesn't bug you too much now, but will seem more pressing once you have a kid to think about and not just the two of you. Also if your gf's nesting instinct kicks in that could be hard if you find you have to move in the not too distant future from your perfect little nursery she's created!
Having said that though, until they start school, moving around is likely to be more of a hassle for parents than a problem for the little 'uns.

riddlesticks

Hi Chris,

First of all I want to say a huge congrats on your news. Its very exciting indeed!

Me and my DF where on slightly less income when we decided to take out a mortgage. We where paying rent of £220 and when we took out a mortgage we where paying £550. 2 weeks after we moved into our house I found out I was pregnant! Eeeekkk! I went on Mat leave and although money was tight I stuck to a strick budget and we where ok. It made me realise that I was throwing money away when me and DP both worked full time. I now work PT and although DPs income has gone up our joint income is a lot less than what it was when we first took out our mortgage. We also manage to save a lot more now! It can be tough some times and we dont go out a lot or buy things for ourselves but we do have enough money to go on nice (ish) hols once or twice a year and buy nice things for the kids etc. By the way we also had huge overdrafts and a loan. We haven't paid off all our debts yet but we are getting there. I think the less money you have the more you are aware of where it goes and you make a conscious effort to pay off debts. If you know what I mean.

My advice would be to work out what your mortgage would be. Do a budget and see if you can afford it? Take into account everything (I always have just in cases as something that I wasnt expecting always crops up). Think of where you can cut back if necessary (you will find loads of tips on this site). Shop around for everything - food, clothes, insurance, broadband, gas + elec etc. Then if you think you can do it I would say go for it. Remember when you are working out your budget that you will be entitled to child benefit (which is £18.10 a week I think) and possibly tax credits (check http://www.taxcredits.inlandrevenue.gov.uk to see if you will qualify) when you LO is born. You can check how much this is In the mean time I would budget your money now and save as much as poss and also try clear a big chunk of your debt off.

Anyway good luck and hope you can get sorted. Oh just remembered you may be entitled to a sure start maternity grant of £500. If you google it Im sure you will be able to find some info.

HTH

AMxx