Can we keep our old house and still afford new one?

jammie*dodger

Hi, just a quick intro. We have a house that has a mortgage of £80 per month on it. We have a seperate loan that costs us £350 per month in payments. I have had to move for work and our house sale is taking forever and looks like t might fall through. We should be able to rent our old house out for £700 per month - and hopefully take £600 of that after fees, etc. I have earnings of £33k per year and have no CCJs etc and a good credit rating.

My question is could I then borrow £250k to buy a new house? On the online calculators it looks like payments on this would be about £1250 per month interest only (we'd switch to repayment as soon as we can afford to - probably in a year or so when my wife goes back to work) so i'd need to find another £650 to £750 a month to pay the mortgage. If we were careful we should alos be able to save a bit in case the house is empty for any period of time.

Any advice would be very appreciated, Rob.

LittleMissAspie

Does your wife have any income? Or are you saying you'd like to borrow 250k on 33k earnings? Cos that ain't gonna happen.

PasturesNew

7.5x salary ... and that'd be if you were ignoring the existing mortgage and debt.

jammie*dodger

We have £170k equity in the old house. Does that make any difference?

Rob.

beecher

jammie*dodger wrote: »

We have £170k equity in the old house. Does that make any difference?

Rob.

If it isn't selling, chances are that this amount of equity isn't accurate. Wouldn't it make more financial sense to cut the price of your house in order to sell quickly to free this money up?

maninthestreet

jammie*dodger wrote: »

We have £170k equity in the old house. Does that make any difference?

Rob.

Only if you can sell it and release that equity to purchase a new house.

jammie*dodger

beecher wrote: »

If it isn't selling, chances are that this amount of equity isn't accurate. Wouldn't it make more financial sense to cut the price of your house in order to sell quickly to free this money up?

We have, 2 offers, both accepted, delays >5 weeks then the sale falls through because the buyers had (unknown) financial issues. Maybe we just need to hold out for the right buyer?

Rob.

beecher

jammie*dodger wrote: »

We have, 2 offers, both accepted, delays >5 weeks then the sale falls through because the buyers had (unknown) financial issues. Maybe we just need to hold out for the right buyer?

Rob.

Depends on how you look at it I suppose - lowering the price would bring your house into the price range of more people. But if you haven't actually bought the new £250k house yet, you maybe aren't under pressure to hold out.

jammie*dodger

Yes I suppose so. It just seemed to add up that £600 in rent + £750 which is what my mortgage payments were going to be for the new mortgage would be enought o pay interest only on the £249k. Don't suppose it really works that way though.

Oh well, back to the market then.

Rob.

worcester1

I reckon the best choice here is to rent out current property take the £600 rental and use that to rent a place in your new area of your work. meanwhile try and save as much as you possibly can - when your old property sells you can use the proceeds + your savings towards your new property

jammie*dodger

Looks like it might not be so bad - turns out that they can't get a mortgage with the current provider but want the poperty so they are looking elsewhere (albeit at a higher rate). Not completely impossible then. :Touch Wood: