400k House...

[Gracie300]

How much money would you realistically need for this?

I’d assume at least 40k deposit, but how much for the stamp duty, fees etc etc?

That depends entirely on your household income?

Joint, approx 95k.

Guidelines are that you don't spend more than 28% of your monthly income on keeping a roof over your heads (so mortgage, council tax, energy etc).

Stamp duty depends on whether you're an ftb or not. Look at government website for rates. Calculators are also available online.

Solicitors fees vary, you'd have to ask a few for a quote,and also depends on whether you have something to sell or not.

Some mortgages are available with 5% deposit, but then you obviously pay more interest.

Google Money Saving Expert's guide to buying a house. Lots of useful info on there. Also the Home Buyer's Alliance webpages.

That depends entirely on your household income?

No it doesn't - the money you need is the money you need!

Are you a first time buyer OP? If so stamp duty will be £5,000. If not it will be £10,000. Legal fees will probably be around £2,000 if you have a property to sell as well.

Assuming you have a £40k deposit and you're young enough to take out a 35 year term, your mortgage repayments will be around £1150 per month. On a 25 year term the payments would be around £1485 per month.

HTH

28% of your monthly salary, you would never get on the housing ladder where I live....

You're looking at £40k for your deposit, £10k for stamp duty, around £3k for solicitors and £1k for a valuation. £1k for moving expenses (could be higher based on area and what you are moving/how far).
So that's £55k of expected expenditure. I think you would be beyond foolish to not have at least another £5k for unexpected expenses and another £5k for immediate remedial works when you move in (just in case).

So with those numbers I think you'll need to save £65k (or have it in equity when you sell).

Thanks all

@Dongdingdong Yes that’s what I meant, initial cost rather than repayments (our earning can defo afford this).

Both first time buyers, no property to sell. So £50k should easily cover it?

Exactly what @SellmeyourMLMcrap said!

@SellmeyourMLMcrap Thanks, appreciated!

No, £50k should just cover it, providing nothing unexpected happens. £60k should easily cover it.

We bought our house earlier this year for £340k.

£50k deposit, around £23k on stamp duty, fees and renovations.

I also read somewhere that BJ wants to scrap Stamp Duty? But, massive punch of salt, obvs!

@Gracie300 they want to change it so the seller pays stamp duty. So any FTB or trading up wins but those trading down lose.

That's around much mine & DP's joint income & we bought our flat for just under 400k last year.

We needed:
40K deposit
5k stamp duty as we were first time buyers
1.5k ish solicitors fees (it was around this, but I can't quite remember the exact figure!)

So 50k should cover it, but if you're anything like me you'll need at least another 5k to buy a few bigger bits of furniture like a new sofa & bed and to cover redecorating.

The 28% thing is a fallacy. If you have a low income spending 28% of it on your mortgage might leave you short. If you have a higher income you could pay 50% on your mortgage and still have more than enough left to live on.

As an example if a family’s joint income (after tax to make it simple) is £1000 then spending £280 on the mortgage will leave them £720 a month for all other expenses. If a similar sized family bought home £5000 a month they could spend £2500 on their mortgage and still have £2500 for other expenses.

When our joint incomes were high the mortgage was close to 60% of our salaries but we still had over £2400 a month for everything else. Even allowing for the higher costs involved in having a bigger house it was more than enough for me DH and two teenagers.

Our house was just over £400k and we put down £185k

Sorry, stamp duty was about £12k I think 🤔

10% would make me nervous unless you definitely won't want to move for at least 7-10 years - you'd be very susceptible to market fluctuations and could end up underwater on your mortgage.

Just throwing that in there in case it hadn't been considered.

Thanks all!

IF they change stamp duty so that the seller pays it, prices will just go up. Crazy idea.

Also something that a few people forget are moving costs, extra insurances for certain issues that arise, home insurance if you want to pay that upfront, the first mortgage payment is often a lot more than a normal month depending on when in the month you complete which all adds up.

I can’t remember the exact amounts but this was a little less than we bought our house for in 2015 - also 10% deposit. I remember we had a contingency fund and we spent every penny of it on various bits - I’d budget £5k - £10k on top of what you think you need.

I don't think they will change it so that the seller pays stamp duty. You are already in a great place as FTB with reduced stamp duty. How old are you? I would stretch yourself if you can. It's paid off for us (but obviously doesn't always).

5% deposit so that is £10k for each of you. Ideally you are buying before babies and have 2 full time salaries which is what we had to do. You might get a 100% mortgage if you have parents ready to be part owners but let us assume 5%.

Then stamp duty - assuming first time buyer there is some relief up to £500k - £5000 so about £2500 per spouse. Pehraps £3k for solicitors and search fees. Estate agent - the seller pays I think You might want to pay for a survey and you will probaly have a removal van hire.

So £29k between the two of you is my estimate - about £14,500 each unless you can get 100% mortgage.

We never stuck to 28% as a guide - you never get anywhere in life without taking risks. We even used every penny of saving and the children's savings when we bought our last house (now restored all the children's money)

The 28% thing is a fallacy. If you have a low income spending 28% of it on your mortgage might leave you short. If you have a higher income you could pay 50% on your mortgage and still have more than enough left to live on.

Exactly this - my first (sole - not flat share) rental was 1/2 my income. Now my rental is 1/3 my income or 1/6 mine and DP's and we have kids so need a bigger place.

I set myself a limit of 'what could I pay on a supermarket wage' - so I don't like going above 1.5k/month on a mortgage, although the two of us together pay more than that on rent.