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  • FIRST POST
    • HarryCuk
    • By HarryCuk 12th Feb 18, 6:57 PM
    • 2Posts
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    HarryCuk
    Help! - How much should I spend on my 1st house
    • #1
    • 12th Feb 18, 6:57 PM
    Help! - How much should I spend on my 1st house 12th Feb 18 at 6:57 PM
    Hi Everyone,

    Me and my girlfriend have been looking for our first house since the start of the year. We had a budget of around 230K for a 2 - 3 bed house in Bristol. We haven't had any success in finding a house we remotely like and we've seen 15-20 by now.
    So now is my question, should I look at houses that are a bit more expensive? We have a 35K deposit and could probably push to 40 if we needed. Our combined income is 65K per year. As the house prices in Bristol are bad, even 250K won't get you much. I've seen a few nice new builds for sale at around the 280 mark but is this pushing it too far? Some people say that that's not too bad and others have gasped when I mentioned it so I'm really confused. Any help or guidance would be much appreciated!

    Kind regards,
    Harry
Page 1
    • robatwork
    • By robatwork 12th Feb 18, 7:37 PM
    • 4,270 Posts
    • 4,675 Thanks
    robatwork
    • #2
    • 12th Feb 18, 7:37 PM
    • #2
    • 12th Feb 18, 7:37 PM
    A rule of thumb is 35% of your income can go on mortgage, which is about 1900 per month GROSS so around 1100 NET but you will need to do your own sums.

    From that, extrapolate back to how big a mortgage you can get.

    If Bristol is still up and coming then you should stretch yourself but not overly so. If the market isn't rising then don't stretch. Are these new builds in areas becoming gentrified?

    Also consider your job security, and if one of you will be giving up work as and when you have children.
    • Cakeguts
    • By Cakeguts 12th Feb 18, 8:00 PM
    • 4,363 Posts
    • 6,235 Thanks
    Cakeguts
    • #3
    • 12th Feb 18, 8:00 PM
    • #3
    • 12th Feb 18, 8:00 PM
    Hi Everyone,

    Me and my girlfriend have been looking for our first house since the start of the year. We had a budget of around 230K for a 2 - 3 bed house in Bristol. We haven't had any success in finding a house we remotely like and we've seen 15-20 by now.
    So now is my question, should I look at houses that are a bit more expensive? We have a 35K deposit and could probably push to 40 if we needed. Our combined income is 65K per year. As the house prices in Bristol are bad, even 250K won't get you much. I've seen a few nice new builds for sale at around the 280 mark but is this pushing it too far? Some people say that that's not too bad and others have gasped when I mentioned it so I'm really confused. Any help or guidance would be much appreciated!

    Kind regards,
    Harry
    Originally posted by HarryCuk

    What don't you like about the houses you have seen? You are not going to get the perfect house whatever you buy will be a compromise.
    • DCFC79
    • By DCFC79 12th Feb 18, 8:06 PM
    • 31,599 Posts
    • 19,941 Thanks
    DCFC79
    • #4
    • 12th Feb 18, 8:06 PM
    • #4
    • 12th Feb 18, 8:06 PM
    How far close to Bristol do you want to be ?

    Did you want to be in the centre ?

    Maybe you need to be realistic (in terms of what you like) with what your wanting to pay.

    What is it you have seen that you didn't like ?

    I don't know what areas you have been looking at but I'm looking now and there's some that are ok.
    Last edited by DCFC79; 12-02-2018 at 8:14 PM.
    Can people stop loaning money/being a guarator to family/friends, it rarely ends well and you lose out as your money is gone or you get shafted with being a guarantor.
    • tacpot12
    • By tacpot12 12th Feb 18, 8:29 PM
    • 896 Posts
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    tacpot12
    • #5
    • 12th Feb 18, 8:29 PM
    • #5
    • 12th Feb 18, 8:29 PM
    You will save money by buying the house you need once. Can you buy a house that will meet your all your foreseeable needs, e.g. space for children? If you can, then I would stretch yourself slightly to achieve this. New builds will tend to save you money on heating and, in the short-term, maintenance. But they also tend to be smaller for the same money.
    • PasturesNew
    • By PasturesNew 12th Feb 18, 8:37 PM
    • 62,429 Posts
    • 365,558 Thanks
    PasturesNew
    • #6
    • 12th Feb 18, 8:37 PM
    • #6
    • 12th Feb 18, 8:37 PM
    The trouble is, you start by wanting a house - and after every viewing you add something more to your "must have" list, so you end up despising everything you view because it doesn't have everything on your ever-increasing list.

    You will never find a house to buy because your list just got impossibly and ridiculously detailed and long....

    When I bought my current house it was simply "A house I could afford, that was under 10 years old and in an area where the name makes people think it's an OK place to live". Buy the best house you can afford in the best area you can afford. Don't nit pick.

    If I'd nit picked I'd have never bought this one..... there's plenty one can always nit pick about in any house.

    Even on the telly when people are spending 600-900k on a house they're nit picking and dismissing houses because their list got too big.

    If you increase your budget you'll just find you're still nit picking ... because you're spending more you're then expecting more, when the reason to spend more was to get what you thought your last money would buy.
    • HarryCuk
    • By HarryCuk 12th Feb 18, 8:38 PM
    • 2 Posts
    • 0 Thanks
    HarryCuk
    • #7
    • 12th Feb 18, 8:38 PM
    • #7
    • 12th Feb 18, 8:38 PM
    Hi guys,

    Thanks for the quick responses! So to answer some of the questions.

    Most of the houses we have seen just didn't have that feeling of being a home for us. We're not tied to an area within Bristol but my girlfriend won't live anywhere further afield. We've been mainly looking in the Hanham/Warmley/Keynsham area as the house prices a bit more attractive, aIso I don't want to live in inner city Bristol (Like I have my whole life!) Plus we couldn't afford it anyway.

    I guess what I'm really trying to get at is, how much is too much? I'd love a new build that I can just move into and redecorate knowing I won't need to do any big jobs any time soon. But as I said, these come with a premium. We've had a AIP for 270K with a rate of around 1.8% but that feels like a big mortgage to have at 25. Has any one got a mortgage similar?

    Harry
    • DCFC79
    • By DCFC79 12th Feb 18, 8:57 PM
    • 31,599 Posts
    • 19,941 Thanks
    DCFC79
    • #8
    • 12th Feb 18, 8:57 PM
    • #8
    • 12th Feb 18, 8:57 PM
    Hi guys,

    Thanks for the quick responses! So to answer some of the questions.

    Most of the houses we have seen just didn't have that feeling of being a home for us. We're not tied to an area within Bristol but my girlfriend won't live anywhere further afield. We've been mainly looking in the Hanham/Warmley/Keynsham area as the house prices a bit more attractive, aIso I don't want to live in inner city Bristol (Like I have my whole life!) Plus we couldn't afford it anyway.

    I guess what I'm really trying to get at is, how much is too much? I'd love a new build that I can just move into and redecorate knowing I won't need to do any big jobs any time soon. But as I said, these come with a premium. We've had a AIP for 270K with a rate of around 1.8% but that feels like a big mortgage to have at 25. Has any one got a mortgage similar?

    Harry
    Originally posted by HarryCuk
    Buy the house that you can comfortably afford, 1 that you would be happy with whether its 250k or 270.
    Can people stop loaning money/being a guarator to family/friends, it rarely ends well and you lose out as your money is gone or you get shafted with being a guarantor.
    • dlmcr
    • By dlmcr 12th Feb 18, 9:20 PM
    • 146 Posts
    • 184 Thanks
    dlmcr
    • #9
    • 12th Feb 18, 9:20 PM
    • #9
    • 12th Feb 18, 9:20 PM
    When me and my girlfriend were looking to buy, we were able to get an AIP for 273k which where we live would have gotten something pretty good. Regardless of the AIP amount our budget was 150 - 180k and we said we would go up to maybe 210k for something amazing. In the end we paid 190k for our place which ticked most of our boxes in what is a very sparse market. I would be very uncomfortable buying anywhere near the high end of the AIP. It is sad that somewhere like Bristol where there is poor value for money, buyers are forced to the upper end of their AIP with little say in the matter. In a simple world I would suggest moving to a cheaper area but unfortunately things are not always that straightforward.
    • Cakeguts
    • By Cakeguts 12th Feb 18, 9:29 PM
    • 4,363 Posts
    • 6,235 Thanks
    Cakeguts
    You have to allow for how you will be able to pay the mortgage if interest rates go up a lot. In the past mortgage interest rates got as high as 17% so allow for that in how much you can afford in monthly payments.
    • JoJo1978
    • By JoJo1978 12th Feb 18, 10:17 PM
    • 344 Posts
    • 424 Thanks
    JoJo1978
    There are likely to be more listings coming on the market throughout Feb and Mar into Spring, so don't be too hasty yet. I'd personally not pay the premium for a new build, mainly due to the larger square footage that older properties have.

    Other questions to ask yourself: how long will you stay in that first house? Is the house more important than the area or vice versa? How likely are you to be staying working in the location you both are now?
    Hamster in the wheel (London) 1999-2017
    Mortgage free since 2015; Pension pot sorted 2017
    Part-time gigger and charity volunteer 2018
    • juniordoc
    • By juniordoc 13th Feb 18, 12:32 AM
    • 364 Posts
    • 286 Thanks
    juniordoc
    With a 37.5K deposit you could get a 15% LTV mortgage on a 250K house.
    If you go for a more expensive house and so have less than 15% deposit you'll get a less favourable rate and it will cost you more in the long run so up to 250K seems like a reasonable line in the sand.
    I'd keep looking and keep saving, and make sure you're in a good position to move when you do find the right property.
    • hazyjo
    • By hazyjo 13th Feb 18, 10:33 AM
    • 10,505 Posts
    • 13,670 Thanks
    hazyjo
    If you can afford it, I'd go for it. You're likely to have pay increases. I'd say get used to paying it before kids come along (if they do) and stay put in as big a place as you can afford so you can stay there long term.


    65k-ish sounds like a very good joint salary for the area. I had a slightly higher joint income with my ex and we had a bigger mortgage. We had put down a large deposit though so maybe the rate was slightly better, although this was 7 years ago, so maybe not. Life was pretty comfortable. We were out a lot and had several breaks/holidays a year.


    What do those who gasped earn? Maybe they were on around the 20k mark each, or thinking of a single salary rather than the fact there's two of you. Some people thought our mortgage was high, but when we split we both ended up with roughly half the mortgage we'd had when it was joint and nobody batted an eyelid.


    I would work out what you have left after roughly accounting for mortgage, bills, food, holidays, car, etc. If it's tight, go for less as there's always an unexpected expense or an increase in rates further down the line. We paid roughly 1200-1300 each into the account to cover mortgage, bills, etc, but had a grand or so each left.


    I may be in the minority with my view as people often go for the lower side of affordable. I have always tended to go for higher (apart from my last move).


    Be warned though - when househunting, you ALWAYS say 'if we just had another 30k-ish we could get what we wanted'...
    2018 wins: Single Malt Whisky; theatre tickets; festival tickets; year of gin(!); shoes
    • need an answer
    • By need an answer 13th Feb 18, 11:08 AM
    • 403 Posts
    • 472 Thanks
    need an answer
    Are you willing to move your search are just a little,maybe to the BS15 postcodes?

    The areas you have been concentrating your search on are quite expensive and I expect very difficult to find something in the 3 bed range let alone even newish built.

    By extending your search it may throw up some slightly more achievable prices and what you get for your money and not compromise the area you want to live in too much.

    Presumably this would be the top end of your budget in your preferred area
    http://www.rightmove.co.uk/property-for-sale/property-62139490.html

    It possibly reinforces that your expectation and budget are not quite together as yet.

    I suppose the question is,what have you seen for 270k that you like?
    In going to that figure does it give you a lot more choice and the ability to stay in the property longer (not a forever home,but one you may be happy with in the medium term)
    If that is the case then maybe you need to push for the next level, as you clearly arn't finding "the place" on the current budget.
    Last edited by need an answer; 13-02-2018 at 2:53 PM.
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    • ReadingTim
    • By ReadingTim 13th Feb 18, 11:20 AM
    • 2,647 Posts
    • 3,782 Thanks
    ReadingTim
    I wish I'd stretched myself more than I did when I bought back in 2006 - my job was secure, my salary was going up as I gained skills and experience, and also had no major life-changing events planned such as getting married or having kids.

    You (and your partner) will need to take a view on future levels of income and expenditure to determine the level of risk you're willing to take now - whilst things usually get easier, events post-financial crash suggest this hasn't necessarily been the case over recent years.
    • getmore4less
    • By getmore4less 13th Feb 18, 12:00 PM
    • 32,035 Posts
    • 19,222 Thanks
    getmore4less
    how much can you afford?

    The bigger the mortgage the less there is for lifestyle

    Do SOA for now and with a house bought at various price points to see where your sweet spot is trading lifestyle for more expensive house.

    The current savings rate+rent will give you a rough idea what you could afford now with no changes

    Rules of thumb are useless they don't scale for disposable income.

    With 65k that's net 3,790-4,230pm

    1,500pm is more than enough for a couple to live on

    2kpm will support a 370k mortgage @ 5% over 30 years(300k @ 7%)

    Still some left for saving/spending.

    Affordability is not the problem with an appropriate lifestyle changes getting a lender to let you have the money might be.


    Another option is to go even bigger with HTB this will give a far better interest rate at the higher end and you can plan an exit using the savings you make.

    Down side is new build premium.

    if you can get big enough to skip a move up the ladder this may be a reasonable trade off it costs a lot to move house.

    300k 30y @ 2% 1,100 plenty of headroom to take rate rises and save till they happen.

    With your deposit and HTB you have a far bigger pot to play with than the 230k you have been looking at
    • steampowered
    • By steampowered 13th Feb 18, 10:14 PM
    • 2,487 Posts
    • 2,407 Thanks
    steampowered
    I wouldn't be too worried about stretching yourself slightly for a first property.

    The lending criteria applied by the banks at the moment is pretty conservative and gives a lot of leeway for interest rate rises.

    If the worst came to the worst you'd just have to cut back on expenses a bit if interest rates rise. That should be easier to do when you are in your twenties.
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