Help with budgeting - mortgage of £100,000 and salary of £43,000

[IlanaK]

I am trying to move house and trying to work out on paper if we can afford the move. We currrently have no mortgage and would need one of 90 or 100 thousand to make the move we want. I do not earn. DH earns 43 thousand. We have written down all our expenses tonight and tried to think of everything including adding allowances for general spending etc. We have cut right back in the last couple of months - no more holidays, takeaways, meals out, etc etc. But it is too early to see if it is making a difference.

So, what I am asking is, any of you with similar pay and mortgage (we live in central london by the way) - is this realistic? Any I just forgetting lots of things when writing out he budget that is making it look better?

Any thoughts?

[QOD]

well we have a mortgage of £170 000 and an income of about £45 000 so it should be easy peasy!!!

[Anifrangapani]

Mortgage of 80K - income £23K ( but no childcare costs) - it is doable but not luxury

[pinkteddy]

Well they always used to lend mortgages based on 3 x one salary or 2.5 times a joint salary. So on that basis £90 or £100K should easily be affordable.

With regard to your budgeting, don't forget you will need some sort of mortgage protection policy on top of the mortgage (to pay up in event of one of you dying) and if you want something more fancy eg: redundancy protection or critical illness protection this will be much more expensive. What have you included in your budget?

[IlanaK]

Ok, what I have included so far:

gas
electricity
water rates
council tax
travel
food
kids classes
clothes
misc
haircuts
insurance policies (including redundancy)
credit card repayment
presents
tv liscence
phone
broadband
mobiles
zoo membership
outings
service charges
mortgage interest/repayments

[Uriel]

What about some sort of emergency fund - replacing the boiler/car, stuff you don't expect to happen?

[pinkteddy]

petrol/train fares?
Car tax/MOT
any pets?
buildings insurance/contents

[moomaa]

Yes realistic. Would say make sure you are happy with the repayments when the interest rates change, we have a bog standard mortgage and are paying over £300 a month less then we were a few years ago.

[moomaa]

school trips?!

[IlanaK]

No car
No pets
No school trips (home schooled)
Buildings insurance is in the service charges
Other insurance on the list

Emergency fund is a good point.
Higher interest rates also a good point.

Any more?

[trixymalixy]

That sounds as if it'll be easily affordable to me, unless you have a huge credit card balance.

[MarthaFarquhar]

We're in a fairly similar position - just taken out a mortgage of 105k, and earn about 48k between us. Works fine for us.

We pay childcare for 2.5days weekly, run one car, and have 2 (cheap) UK based holidays annually. We've not a penny of non-mortgage debt to service though. The books balance .

It might help your figures to know that we're paying £580pcm on the mortgage. We took ours out recently, so I'm sure you could get a similar or better deal.

[IlanaK]

On paper, it seems affordable. But I am still worried as we have been mortgage-less for about 5 years now and acruing debt. Obviously, we have been spending unwisely and have changed all that now, but worried it is not enough.

[Wonderstuff]

We have income of £45K and 100K mortgage, we also have full-time nursery 2 days a week and ccard debts of about 10K and we manage fine. Bank reckons we could borrow £165K (trying to move too)

What on earth are you buying in central London for 100K?? (nosey)

[IlanaK]

Not buying for £100000!! Need £100000 more than the sale of our current flat (no mortgage on that) to be able to move.

[Wonderstuff]

What a nice position to be in. Depend also on how long you are taking a mortgage out for. I imagine with that amount of equity you should be able to get a really good deal at the moment. Should be totally doable.

[CarGirl]

How much credit card debt to you have and how much are you paying off per month? How old is your dh? Depends what length of term you can get (or could go to if the interest rates rose)

What would you be prepared to go without if you needed to in the future? Zoo pass, expensive hair cuts etc.

[IlanaK]

My dh is 39. We have about £3-4 thousand in credit card and overdraft debt. We pay off about £100 a month.

Not sure I would be prepared to go without much else. We really did cut things right back a few months ago to reduce debt. We have very few "extras", no holidays etc. The zoo passes may seem a luxury but are not pricey and we use them tonnes and tonnes.

[trixymalixy]

Hmm, the accruing debt while you have no mortgage is a bit worrying.

If it has just been general living outwith your means and a gradual build up that would worry me a lot more than being naughty and blowing it on an expensive holiday.

[CarGirl]

you def need to work out why you've accrued that debt. Your mortgage would be around £400/£500 per month so that is how much you should be spending on repaying your debts now and seeing how happy you are with doing that.

[IlanaK]

Oh I know why we acrued debt - we took lots of holidays we couldn't really afford on credit card, we bought lots of things we shouldn't have on credit card, we ate out a lot which we couldn't afford. Basically, we lived like we earned a lot more money than we did.

[Wonderstuff]

Also take into account council tax will be more in a larger house and work out what will happen if interest rates go up (cos they will at some point)

[IlanaK]

I have looked up the exact council tax for the property we want to buy and put that in the budget. We live in Westminster with really low council tax and are moving out of the borough so it doubles for us

[IlanaK]

Yes, the money went on expensive holidays and such like. The debt we have is, as said, abotu 3-4 thousand on credit card and overdraft combined. We have made all the changes to our spending to pay this off and not acrue more.

My husband has a very good pension through work as well as private health insurance for us all.

We can't wait this out unfortunately - too complicated to go into, but problems in our building and crippling service charges mean we have to move now.