To buy a £700k house on £67k

[Polledja]

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 She has become withdrawn and depressed during this process and it caused allot of tension.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

OP, it's not even up for consideration. You won't get that mortgage to buy a £700k house without either a lottery win or a gift (not loan) of a huge amount of money.

There's a lovely house near me I would love to buy for £500k. But I can't.

I would also doubt the payments being £2k a month on that amount. It would be higher.

Are your figures correct? I can’t seem to find lender who would lend 350k on a joint income of 67k, I don’t think you’d get that much as lending is really really strict at the moment.

Anyway with 3.9k a month I don’t think repayments of 2k a month are responsible, I wouldn’t leave myself with nothing each month not in this economical climate we are in.

No way you cannot afford that. We owe about 270k on mortgage (no other loans) and have household income of 85 -90k. Both can work overtime and earn more than this. Have no kids and keep our outgoings low. We are comfortable but I wouldn't want to borrow anymore than this , you need room for big increases in interest rates and expensive life events , car repairs, house repairs etc. Plus you would never be able to pay back that 90k to family.

Of course she doesn’t. She hasn’t got the income for that. Just as she doesn’t for a £700k house. She needs to get herself over that.

Read the quote history. I am not talking about OP.

@TrinaLowsln I like your style. We actually don't own but we live in a lovely rented house in Bath and pay good rent to do so. We intend to buy somewhere reasonable outright overseas and a part buy in UK in next 5 years. We buy other stuff as investments and invest in our business. My H absolutely refuses to pay a ton of money to live somewhere he doesn't like and to be honest there aren't that many places he likes that are remotely affordable even on £120k income. I kind of get it because I see the sums people are paying on here to live in some very average homes and it's nuts

I think we'd all like to love in the cloud cuckoo land of "I earn an average salary and want the world on a stick" but alas, reality bites.

You have a household income of £80k, but pay a massive amount into your pension so you can get £150 a month in benefits?

Really?

DH and I have no family cushion whatsoever, neither sets of parents have a pot to piss in between them. Still not financially risk averse. Not stupid, not reckless, but not risk averse.

What industries do you work in, how secure are your jobs, is there any potential for additional earning? When we bought this house about 7 years ago our income was a bit lower than yours now probably around £62k. Our house cost £295k we put down £35k deposit so mortgage of £260k we kept cash back and both worked second sessional/bank jobs in the same industry to pay for our wedding and to renovate the house (that plus savings gave us an extra 50-60k over a couple of years). We had no DC at the time. However interest rates were much lower so our mortgage payments were around £900 which was absolutely fine, but I'd imagine would be much higher now given interest rates.
We also knew our career trajectories were nearer the bottom than the top. Joint income will be close to 100k by the end of this year (both still working overtime!) so we were careful for a while and neither of us have extravagant tastes so it was fine. You seem to suggest there's not much room for earning potential to increase by much.

So, once you've stretched yourself to the point where you have a value beans budget for the rest of your life, what will you do when your wife is depressed because the house isn't furnished the way she wants, her clothes aren't the clothes of someone who lives in that sort of house & she can't join the clubs that people who live in those houses join/have the same social life they do/get her hair cut in the expensive salon they do etc..?

Where does this end other than bankruptcy?

You cannot afford a house in that price range & it sounds like you can't afford your wife.

She's asking for a champagne lifestyle on a cider budget.

She should be looking at upskilling so she can get a better paid job if she wants to have a bigger house buying budget, because she doesn't earn enough to get a studio flat in most places.

Our joint salary is more than yours and we bought a 200 house. 700 is crazy.

No advice on your finances but given bank volatility ensure your 280 deposit is in diff banks so that it is protected.

What is the main difference between the 500k-700k houses you are looking at? Is it decor or square footage? Could you find anything for closer to 500k and do it up over time or build an extension or something over time to make it more like the 700k houses? I think the key is getting into the area first if it is for schools. If you're outside the area, the prices in your existing area might not increase as much as the houses in a better catchment. So getting a foot in the area is more important than finding the forever house straight away.

One of you has to be the grown up in this situation. Don't do it. The monkey on your back is the mortgage. Don't flog yourself to death for a pile of bricks.

I wouldn't. To me, I go off the following:

Would the mortgage be less than 25% of our combined salary?
If your mortgage interest went up by 5% could you afford it?
If one of you lost your jobs could you afford it?

To me, unless the answer to all of the above is yes, it's risky. My mortgage was £720 a month, due to the increased interest rates, new fix is £1000. We could have borrowed almost double what we did, I dread to think of the situation we'd be in if we had.

You can have a lovely house without massively overstretching your finances.

I guess she would also be unhappy not to buy nice things for your kids, go on holidays, nights out and have beauty treatments. I think she sees you as her 'cash cow' given the limitations of her own earnings!

Ridiculous idea. You won’t even get lent that much

I'd like to live in a £1 million + house with a sea view and a huge garden.

However our income, family budget, number of children dictate otherwise.

I fancy that too. I could afford to go halves.

Yes but, you can’t afford this.

Look for a house at the cheaper end of the range in your preferred area. Life is for living, not a mill-stone around your neck. The tension you will feel if over-committed will affect your family life and your children's happiness too.

If you want the best of both worlds, how about one with potential to extend later if your income increases? But in the the meantime, liveable as it is.

Your deposit savings are incredible and I hope you both feel pleased and proud with what you've achieved.

Please don't do this. It will ruin your lives. Me as and DP have no children and a gross income of circa 280k and our mortgage is 330k. It can be so tempting to keep up with the Joneses but you will be so much more miserable if you do. We were living in a (lovely, large 3 bed flat) a few years ago and my DP was determined we ought to buy a 700k house because our friends were. We have since bought a beautiful 4 bed Victorian semi and spend 60 on a significant extension and we couldn't be happier. X

The thing is, whilst you’re paying for the perfect house, your perfect life is passing you’ll by. Life is for living- borrow less, live more.
Bricks are just bricks t the end of the day.