To buy a £700k house on £67k
Polledja · 18/03/2023 19:08
My wife and I are looking to buy a house. I was very foolish with my money during my younger days so am behind my peers.
we want a house near a good school and houses in that area range from £550k to £700k. The ones my wife likes are at the higher end but I don’t think we can afford these. She has become withdrawn and depressed during this process and it caused allot of tension.
I have approx £280k for a deposit (this is all our savings bar £18k). We can borrow £350k based on our joint salaries of £67k. It leaves me £90k short. I think I could borrow this from family.
our net pay is £3900 per month. We would have £2000 tonoay on our mortgage leaving us with £1900 to pay everything else. We have two young kids at school. Our monthly expenses excluding our mortgage are about £1600 so it would meaning having nothing left each month
Am I being unreasonable?AIBU
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YukoandHiro · 18/03/2023 19:09
Do not do this. You have no slack in that calculation. Have you even looked at whether you can afford the repayments?
Polledja · 18/03/2023 19:09
Sorry wanted to ask if this would reasonable to do or not. It’s become a pretty difficult conversation with my wife and it’s causing a strain on our marriage if I am being honest. Her reasoning is that we are only going to buy a house once so we might as well make it the most we can afford
DanceMonster · 18/03/2023 19:10
How would you pay your family back if you have no money spare each month?
YukoandHiro · 18/03/2023 19:10
I don't think a lender would offer you it at this time. They're v strict on affordability criteria due to cost of living.
MsCunk · 18/03/2023 19:11
This is a terrible idea, but it doesn't really matter because you won't get approved anyway.
Isanyholeagoal · 18/03/2023 19:12
Buying a house of that value is a terrible idea with the sums you have listed. There is no scope for increases in bills / mortgage and will leave you nothing to fall back on. Would your wife rather lose her expensive home when you can no longer pay for it? Sounds like she’s trying to keep up with the jones’
Merangutan · 18/03/2023 19:12
The fact that you’d have nothing left each month and still need to borrow money from others to fund it is a clear sign you are stretching yourselves beyond what is personally affordable on your income. I would never buy a property that left me this skint each month. Think of what you’ll need to purchase over the next ten years alone. Where do clothes, holidays, haircuts, cars, Christmas gifts, boiler replacements, carpets etc come from?
amiold · 18/03/2023 19:12
This is ridiculous.
Me and op have a joint of 110k and I won't let him look at houses over 300k.
How would you live comfortably on £1900. Do you have kids?
Woofappreciationday · 18/03/2023 19:13
In the current economy? No i wouldnt stretch myself that far, life would be miserable. I would be looking at the low end of that scale as maximum.
Im also surprised you can borrow £350k from a £67k income? Are you sure this is correct?
bellac11 · 18/03/2023 19:14
Is she living on another planet, is she being controlling about this with you? Sounds like a bully to me. Let her fill in all the mortgage application paperwork and get turned down.
HappiestSleeping · 18/03/2023 19:14
I'm afraid I'm with the previous respondents. It doesn't look like this is affordable and will leave you with no slack. Interest rates will likely go up further, and you will also need money for fixing stuff in a new home.
I think your options are to live somewhere else. The good news is that property prices are at their lowest level for a while, but that is offset by the interest rates and the state of the economy.
Hankunamatata · 18/03/2023 19:14
Nope. I'm a believer in max of 3.5 times salary so 234.5 plus 280. You can afford a house around 515k
Quietlyunconfident · 18/03/2023 19:15
As said already, you really can’t afford this at the moment.
Are your salaries likely to significantly increase soon??
if your current salaries aren’t going to change much you really need to look at cheaper houses/ a different area. Sorry!
Itsonlyagame · 18/03/2023 19:15
Absolute lunacy. I wouldn't be borrowing more than 220k on that income.
Woofappreciationday · 18/03/2023 19:15
The loan from family would also have to be a gift otherwise the lenders take it into account into the affordability calculator. Would family still be willing to "gift" you that amount. I know i wouldnt.
MissMarianHalcombe · 18/03/2023 19:15
This is madness. There’s a reason why there are rules over affordability calculations. What will you do if interest rates rise in the future? Have you factored in additional energy costs & higher council tax?
I hope you’ve factored in life cover & critical illness premiums as goodness knows what would happen if one of you became ill.
PeekAtYou · 18/03/2023 19:16
50% of joint salary on mortgage is way too high.
What if expensive items like cars break down ?
What if one of you lost your jobs? What if Cost of Living mean that basics like energy cost more? I would not live in or want a 700k house if it meant eating instant noodles for every meal.
Speedweed · 18/03/2023 19:17
You know you won't be approved for that amount, so just let her do her thing and get all excited - as soon as you both apply for a mortgage, they'll turn you down.
It would be a different situation if you were saying you could afford the mortgage payments but think they were too high and would expose your family to financial risk, and your wife was unhappy.
But she may as well be looking at million pound houses, because the answer from a mortgage broker is going to be the same.
MotherOfPuffling · 18/03/2023 19:17
That’s a hard one. Moving is so expensive (stamp duty, legal fees, estate agents etc.) that it’s definitely best to avoid doing it more than you have to. Is there a possibility of a smaller property but adding an extension or loft conversion? Or a house that needs work?
What would you do if your costs unexpectedly went up, or income went down? Can you reduce your costs at all? For a start, to get the maximum income you’ll need to show affordability and that means cutting extraneous spending.
KikkisCat · 18/03/2023 19:18
You simply can't afford this- don't forget you will have stamp duty to pay aswell, another £20k+ on a £700k house.
MoneyInTheBananaStand · 18/03/2023 19:19
You won't be approved for that mortgage so it doesn't matter anyway but you are crazy to consider it.
I wouldn't borrow more than 200k on that kind of salary.
The problem with "keeping up with the Jones" is that it never stops OP. It's the house now, next it will be private school, fancy cars, ski holidays in Aspen etc etc etc
Best to put a stop to it now and live within your means. You have a great deposit, and you can easily buy a really nice home. Your wife will just have to get over herself.
milkshakeandchips5 · 18/03/2023 19:19
Hi OP. We bought a 700k house last year. Our joint income is around 140k. We did have a smaller deposit but with childcare and the expected higher interest next year it's not all that enjoyable. I think you'd struggle I'm afraid!
surreygirl1987 · 18/03/2023 19:20
No way. We bought a £625k house on a joint salary of £120k and we struggle (although nursery fees are a big reason for that!). I'd never do it on a joint salary of £67k. Very very risky.
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