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Upsizing

2

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  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    Holiday Haggler
    AdrianC wrote: »
    BTW - if you earn £57k, how come you only have £5k in savings? You will have roughly £3,400 per month after tax. Your current mortgage is going to be costing you a tiny fraction of that. What are you doing with the rest?

    There is a very MSE thought process that dictates that people on higher incomes will also have lots of savings. Many people also spend lots of money on other stuff like cars, holidays, doing their houses up, childcare costs.
  • AdrianC
    AdrianC Posts: 42,189 Forumite
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    ringo_24601 wrote: »
    There is a very MSE thought process that dictates that people on higher incomes will also have lots of savings. Many people also spend lots of money on other stuff like cars, holidays, doing their houses up, childcare costs.
    ...and then they look surprised when a lack of savings comes back to bite them...

    Nobody's saying that you can't spend a good chunk of your disposable income. But basic common sense says that you have enough put by to cover several months without income. If you're tied into substantial spending commitments, then that cushion needs to be similarly substantial.
  • Mutton_Geoff
    Mutton_Geoff Posts: 3,817 Forumite
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    edited 3 October 2017 at 5:18PM
    AHIM wrote: »
    That's my approximate equity in the current property. So I have about 70K left to pay


    You are confusing your equity relative to your purchase price which is no longer relevant. Your equity is it's resale value after costs less your loan.


    Say it did sell for £325,000, then your sale statement would look like this:


    Sale £325,000
    less
    Agents Fees £3,900 (1% plus VAT)
    Legal Fees £1,000
    Moving Costs say £1,000
    Mortgage Redemption £68,000


    Balance £251,100


    You may be able to borrow up to 4.5x income especially as you have a decent income. You won't be able to not get a mortgage as you get older, it's just the term shortens as lenders want you paid up by retirement. Many lenders go to 70 now. I'm 59 and have just taken out a 10 year mortgage. You will be fine with 25 years or more.


    You should be able to borrow £250k, especially since your loan to value (LTV) will be less than 60%. So your purchase budget would be something like this:


    Proceeds from sale £251,100. Retention for "rainy day" £10,000, balance £241,100


    Purchase Price £475,000
    Deposit £241,100
    Mortgage £250,000
    Stamp Duty £13,750
    Legals £1,000
    Sundries £1,350 (new bits furniture for upsize)


    Total Purchase Costs £491,100 with mortgage of 53% LTV.


    You're a bit short for a £550k purchase I'm afraid.
    Signature on holiday for two weeks
  • Ithaca
    Ithaca Posts: 269 Forumite
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    We re-mortgaged on a 30+yr term at age 37 (which will put us well past 64 by the time it's paid off). No problem at all, and no apparent penalty in terms of available rates etc.

    In terms of the mortgage lending the 4 x salary is a guideline but many lenders will now work on affordability (i.e. someone earning £3500/month with £2000 worth of monthly loan commitments may not be able to borrow as much as someone earning £3000/month with no loans or credit etc).
  • Crashy_Time
    Crashy_Time Posts: 13,386 Forumite
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    When a buyer has paid you is the time to figure out what you can or cannot afford IMO.
  • hazyjo
    hazyjo Posts: 15,470 Forumite
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    Crashy_Time wrote: »
    When a buyer has paid you is the time to figure out what you can or cannot afford IMO.
    Not really, no. You'd be homeless. Sell and buy together, unless there's a reason why you can't.
    2023 wins: *must start comping again!*
  • Crashy_Time
    Crashy_Time Posts: 13,386 Forumite
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    hazyjo wrote: »
    Not really, no. You'd be homeless. Sell and buy together, unless there's a reason why you can't.


    What I meant was don`t just assume you will get a certain price. IMO many people would be better to stay put unless they really need to move now, because the stress of finding a buyer at a price they like just isn`t worth it.
  • hazyjo
    hazyjo Posts: 15,470 Forumite
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    Crashy_Time wrote: »
    What I meant was don`t just assume you will get a certain price. IMO many people would be better to stay put unless they really need to move now, because the stress of finding a buyer at a price they like just isn`t worth it.
    Not getting into a price crash debate, but wanted to add it entirely depends on the area, demand, etc. Your statement will always apply to some areas, even in a booming property market!


    If the market is falling in their area, it can be a good time to buy if they have enough equity and/or savings. Done it myself - always worked out to my benefit in the long run.
    2023 wins: *must start comping again!*
  • Crashy_Time
    Crashy_Time Posts: 13,386 Forumite
    First Anniversary First Post Name Dropper
    hazyjo wrote: »
    Not getting into a price crash debate, but wanted to add it entirely depends on the area, demand, etc. Your statement will always apply to some areas, even in a booming property market!


    If the market is falling in their area, it can be a good time to buy if they have enough equity and/or savings. Done it myself - always worked out to my benefit in the long run.


    No, I don`t agree, in the heyday of the boom (bubble) most people could assume they would get offers over their daft asking price, or at least get their asking price IME. That is what bubbles (Ponzi schemes) do, they distort people`s idea of value.
  • Mutton_Geoff
    Mutton_Geoff Posts: 3,817 Forumite
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    Crashy_Time wrote: »
    That is what bubbles (Ponzi schemes) do, they distort people`s idea of value.


    An economic bubble is nothing like a Ponzi scheme.


    I read your posts with interest but I wonder whether you've actually owned any property or seen real losses and gains in the property market?
    Signature on holiday for two weeks
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