To think we might have made a mistake.

[FrenchRuby]

We're currently living with mil so we can save up for a house. I've been doing calculations and using mortgage calculators to try and work out how much we'd have to pay back a month and things like that and even if we came up with a good sized deposit I don't think we'd be able to afford the repayments each month. I'm now thinking that we should have stuck at renting because it was half as expensive as what these calculators are saying that I would be paying.
I feel really guilty because it was me pushing for us to move so we could save up :(

I suggest you talk to a human and find out what you can afford etc x

Look at housing scheme's in your area. First Buy, Shared Ownership. Go to your bank for a mortgage consultation. You'll be surprised at what you might be able to afford. When it comes to getting a mortgaged- shop around!

I don't think it helps that I don't really understand how they work, I'm so bad with money things. It's a good idea to talk to someone, thanks :)

Even if you have made a mistake I am assuming you have managed to save some money while with mil which cannot be seen as a bad thing.

What you can afford to buy is not always the same as what you can afford to repay. That's why these calculators aren't always helpful - they don't take into account the rest of your life!

Rather than go for what we were told we could afford, we worked out our monthly spends (food, travel, bills, savings etc) and then what we had left was our mortgage budget. When we spoke to a mortgage advisor, we told him we could probably afford £X per month and he then told us the kind of price bracket we were looking at.

Money Advice Service is a brilliant website - we used their budget calculator to work out our outgoings and our savings etc.

Well moving in with MIL before really understanding how mortgages work was probably a mistake, but one that's easily fixed. And as squid says you've almost vertainly saved something while living with MIL.

If you are in the UK I'd be very surprised if a mortgage costs more than renting for an equivalent property.

go to an estate agents looks at a house you might like there is schemes for first time buyers low deposit schemes mortgage calculators do my head in and some are not that accurate . look at new builds in your area sometimes they have low deposits and incentives to buy

Thanks for all the advice :) I'm definitely going to speak to someone who knows what they're talking about, and the budget thing is a good idea too, I'll sit down with and talk that through.

Rentals around here are usually the same or more than a mortgage repayment, so if you have a deposit then I would have thought if you can afford to rent then you can definitely afford to buy?

Good luck

Cheese is right - look at what you can afford to pay out an a monthly mortgage payment, and make sure the bank don't lend you any more than that!

Speak to a broker if you want more impartial advice.

To be honest you need proper financial advice not calculators which are broad brush strokes of opinion. I would suggest a financial advisor is best bet, if nothing else a broker at an estate agent. Mortgages are possible but you need help.

We have just bought the house we were renting and our mortgage is significantly cheaper than what we were paying in rent! And that was with a 10% deposit.

Remember that interest rates are stupidly low ATM. They can only go up from here, so don't borrow right to your limit. Otherwise you will be completely stuck when the inevitable rise comes
Be careful with the 'advice' you receive. The broker will get paid if you take out finance and will get nothing if you decide to rent. So them scratching around for a deal that on paper you can afford will certainly be in their best interest, but not necessarily in yours.

Definitely go see a mortgage advisor. I had that same ''oh no'' reaction after getting some figures from a calculator but our actual mortgage is cheaper than what we were paying in rent and that's even including the buildings and life insurance.

If you were renting privately I'd be hugely surprise if you couldn't afford to buy somewhere (as long as you have a decent deposit). Around here rent is roughly twice the amount of a mortgage on a property with a 20% deposit.

Do remember that estate agent mortgage brokers deal with specific companies usually only one, so they can only advise on these products.
I have never used a financial advisor as they are usually looking after themselves, optimising their profit and not necessarily giving you the best advice for you.
learn about mortgages, how they work, the different products on offer and the companies with good reputations.
You can ask friends and family who they use, you can view the different products and companies online on comparison sites and money supermarket.com.

On the calculator thing I was using it said we'd be payig£1500 a month :o whereas our rent was £650 a month.

That's the wrong smiley face haha

I bet you've put the wrong figures in by mistake. Check how many years and what percentage.

If you used to pay your rent every month with no difficulty then you should be able to afford a mortgage instead.

Make sure you find a mortgage where the monthly payments are at least 20% less than what you used to pay in rent - remember that you will have additional expenses as a home owner as you will have to pay for maintenance and repairs, plus you need some wiggle room for if interest rates go up in a few years.

Totally as a very rough rule-of-thumb, if your MIL is charging zero rent, and you are putting 100% of what you used to pay in rent into savings, then the amount you have in savings after 12 months should be about enough for a 5% deposit on something modest.

In my experience even post credit crunch lenders are offering loans that are far too large to be actually affordable, but so long as you keep the monthly repayments to a level you know is managable you should be OK.

If a year's worth of rent doesn't get you enough to be able to afford something livable, investigate shared-ownership schemes in your area. In some areas you need to be on the council house waiting list to apply for shared ownership - but anyone can apply to be on this waiting list and you don't have to be anywhere near the top of the list to qualify for shared ownership so anyone can do it.

French, that's the reason you need your budget to dictate what you can afford rather than be told by a budget calculator what you will be paying.

We were told we could borrow for a house value up to £120k, but could actually only afford to pay back up to the value of £100k. Just like you, the numbers didn't add up so we worked from our monthly budget rather than what the bank would give us.

exactly cheese - the online calculators assume that you will be willing to eat nothing but beans on toast, wear nothing but charity shop rags and never have the heating on or go on holiday in order to maximise the size of the loan you can take. Pure silliness.

I get the impression you have decided how much you will spend on a house before doing the sums. That's the wrong way round. What you should be doing is deciding how much you can comfortably pay a month, check what mortgage rate you are likely to pay and then see how much you would be borrowing if you paid that amount for 25 years at the interest rate you found. E.g

Taking your figure of 650 a month as what you could afford on a mortgage.
HSBC 5 year fix 90% mortgage is 4.69%

Playing with a loan calculator shows that a £115k mortgage will cost £646 a month, so £115k + your deposit amount is what you can buy a house for. If there are no houses in the price bracket you come out with that you want to live in, then you can't afford it.

BTW if you do speak to someone for advice, don't go to a bank.

That in our area wouldn't even get you a studio flat :/ houses round here are so expensive. This is why I think we've made a mistake.