Worried First Time Buyer - In Too Deep?

seraphina

There's some great advice on this thread - I love MSE!

Ultimately, it's your decision. The fact that you are seriously looking at whether you can afford it is a good thing - it's far better than rushing in blindly. Other people may be pressuring you to buy, but it's not them that will be scrimping and saving to pay the bills! It's not easy to tell them to stop interfereing in your life (which is effectively what they are doing) - my in laws have always been on at us to buy a place, but their tune is changing now.

You're young. It's time to enjoy yourself for a little and save what you can.


All the best whatever you decide:money:

PasturesNew

Hmmmm. As I see it, salaries of £11897 and £14197 are really low. However, combined, they end up being a LOT. This is shown in your outgoings where the combined income is a hefty sum (compared to one person's wage)

amosp wrote: »

Net Monthly Income £1739

Mortgage £688
Life Insurance £29
Home + Contents £20
Gas/Water/Electricity £75 - should be able to get this down to £40 easily enough
Council Tax £100
Home Phone £15
Mobiles £30
TV License £22- it is £12
Car Tax £20
Car Ins. £65
Services £10
MOT £10
Petrol £90
Food Shopping £260 - you can reduce this easily by half. Being generous, say £150/mth
Pets (Just fish) £5
Dentistry £2.5
Optical Health £5.5
House/Garden Maintenance £10
Health & Beauty £5

Remaining:277

With my adjustments above you'd be £155/month better off.

But, money isn't the real issue is it.

I believe on the figures above YOU could do it. But it seems like your OH couldn't. You'd probably row a lot over money as she'd not understand where all her money were going. The only way would be to control the finances by demanding her full half from her every payday so she can please herself with what she's left with. But she runs a car so you'd have to leave her with enough petrol for work, which she'd have also spent on other stuff by the 15th.

House prices don't always go up.
At the moment they are going down/sticking. This will continue to happen for maybe 3-4 years.

Rent somewhere. Work to your above budget, saving any spare into the "house fund".

Live together and find out if you annoy each other.

As has been said, new builds do cost extra. You're being sucked in because they appear to be giving you the deposit. They are not a charity. That fake deposit is hidden by them putting up the price higher.

Mortgage lenders are looking out for this gifting. They don't like it.

When you buy a new house, it's empty. You'd have to buy carpets, curtains, lamp shades, light-bulbs. Everything. The whole lot. If you rent furnished that's the first pot of money you can save away.

You'd also have to pay solicitor, searches etc. And stamp duty. That's another £2000 you can immediately put in your pot of savings.

So, rent with your gf. Squirrel away every penny you can for the next 4 years, buy in 4 years' time.

Jonbvn

amosp wrote: »

Barnaby,
We have a car each, a service costs £60 and an MOT costs £40 which I’ve spread out over a monthly basis. Of course there may be additional costs for any repairs that are required which is something I can’t really hazard a guess at. As for insurance, we are 22 and 21 so it is a little high at the moment but is dropping each year.

IMHO, 2 cars and a big mortgage (relative to your salaries) is just stretching things too far. If anything goes wrong, you could end up losing everything.

The MSE approach in such circumstances is to rent, save like mad for a deposit and watch house prices drop (esp. new build) drop all around you.

Kez100

Also, if you rent could you be located closer to one work place? Then you could sell a car and save a lot more towards a future deposit.

Badger_Lady

The biggest benefit I find to renting is just working out what you can afford.

My OH and I lived together in 2 rented properties for a total of 3 years before we bought a flat together. Our rent was £575 a month when the mortgage broker said "if you take out this mortgage it'll be £560 a month" - we knew it would be fine

And, incidentally, we split up within 6 months of moving in... you never know what the future holds :rolleyes:

poppyolivia

Great advice on here but I can see where the OP is coming from about renting property, I never have and would never rent, it also seems like 'dead money' to me too...at the end of the day are you not paying someone elses morgage when you could be paying your own?

Kez100

Mortgage interest is dead money too.

It's the repayments (very small to start with) and the increase in property prices where one benefits from owning. If property prices fall.......well, it's not rocket science.

moneysavinmonkey

My advice is to make an 'informed' decision..

.. you have made some great steps already by trying to work out if you can afford it - but your someway from knowing what the true costs of setting up and running a home are. You also need to take into account future costs and what ifs? Interest rates, Girlfriend pregnant, loose your job or become il etc.

- you also don't know what it would be like to live with your girlfriend and have joint financial responsibilities.

- you haven't explored the alternatives.. there is absolutely nothing wrong with renting.. have you even looked what is available!

- have you checked if your new build is really as good a deal as you think - they are notoriously overpriced - make sure you compare your deal with sold prices of older properties... when you come to sell your property it will no longer be new so expect to loose the difference - much the same as buying a new vs second hand car.

- have you researched the property market in the area? What are house prices doing now (not last year!) Most places in the UK prices are now falling.. this isn't necessarily a problem.. as long as you don't need to re-mortgage or sell the house! But if you local market is tanking you could save yourself some money by waiting a few months.

My opinion: For the ages you are, the salaries you are on and the current state of the market it sounds like a pretty bad idea. Too many things can go wrong and I really don't see any advantage at all! On a personal level I think it would be a big mistake to go straight from living separately at home with your parents to living together in a home.... definitely rent first.

barnaby-bear

Is the mortgage repayment though?

At 5.7% I make a 90% (123k) mortgage:

£779 Repayment
£583 I/O

whether it's interest only has a bearing, or is it a very long mortgage? Can't work out the figures - if it's long term (e.g. 35years) or IO there isn't that safety net and the amount being repaid early on is very small so debt reduction is small too so you need more "faith" that house prices will increase to be better off after a few years....

poppyolivia

Kez100 wrote: »

Mortgage interest is dead money too.

It's the repayments (very small to start with) and the increase in property prices where one benefits from owning. If property prices fall.......well, it's not rocket science.

But at the end of your term what do you have? Nowt! A big fat hole in your bank balance, where as with a morgage yes it can be tight some times but at least you own something....

I haven't had great jobs believe you me...I'm talking about the same income as OP....I have turned 32 and paid off 2 morgages.

Depends what way you look at it.