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 She has become withdrawn and depressed during this process and it caused allot of tension.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

[wentworthinmate]

The bank will never agree to lend you this at the moment.

[SoHereBesMe]

We have a joint income higher than yours and would never ever put ourselves under that financial pressure.

Not an easy conversation to have with your wife but think it's a necessary one. There'll be no enjoying life if you can't live within your means.

[AfraidToRun]

I can guarantee that you have vastly underestimated your outgoings.

[SomePeopleAreJustBloodyStupid]

Lunacy. Stick to something within your budget.

[shellyleppard]

If you can't afford it, having to borrow money to afford the "dream" property......its not going to work. You will be constantly worrying about paying the mortgage and your family. Don't overstretch your finances.....cos mortgage rates could go up and you will be in serious trouble.

[Twentytwothousand]

You can’t afford it. Buy the best you can afford, don’t exceed that amount. Defaulting on payments just ruins your credit rating and how will you pay back your family and friends the £90k? You’ll be skint, friendless and possibly homeless. All to avoid an atmosphere at home? Unless your partner is able to find extra cash it’s simply a reality check you need. Not to over extend your family finances.

[Anotherturnipforthebooks]

@pinkbaglady

My DH and I bring in about £6000 a month and I wouldn’t dream of buying a house over £280,000.

why? Because we’re financially responsible.

This, is where you suggest that people spend the minimum on a house and say they're irresponsible if they don't!

[Silvers11]

Absolutely no way would I do this. Would put such HUGE pressure on you all, especially in the current climate

[LennyThePenny]

Interest rates will be rising for the foreseeable, there are too many global issues currently and they've been historically low for a long time now. We're heading upwards. This needs to be factored into your sums.

[rOsie80]

I sympathise with your situation. It's easy to look at others and think you're 'behind' but actually you're describing a situation where you're doing better than most. Everyone has to work harder for the same as the generation before and this skews expectations. You never know what help other people have had and their personal situations. A 700k property, so basically a nice 4 bed with a drive, garage near a good school is simply not feasible for you - yet. Aim to compromise, work out what's most important; garden, kitchen, location. You have really good savings. Rethink what you're putting into your pension when childcare is no longer required and maybe consider other tax efficient savings so the money not locked away so tightly. I suspect you're being negative about your future earning potential. I really hope you and your wife can find a way to move and improve your current situation without stretching yourselves and also recognise that what you ultimately want is possible in time.

[Jafferz]

No! What if one of you loses your job? We have a combined income of over 250k, only one DC (not having more) and am thinking 700k is pushing it. Albeit our deposit is lower at around 200k.

[KatJansen]

The area describes somewhere I live in the north.
3 bed semi’s with small gardens are around £550k
4 bed semi’s with larger gardens around £700k
the schools keep the house prices up
with your income, I would tell you wife that she needs to be realistic and look for the £550k houses. Remain for a few years to build equity.
we bought our 3 bed for £200k 8 years ago, now valued over £500k (more £650k with a recent 4 bed extension) - the cheapest already renovated houses around here are £550k. Our garden is tiny hence ours being slightly cheaper than the average house in the area

At the time, the 3 bed wasn’t our ideal house but we had vision - waited until the kids were older so increased our hours, and less childcare costs. Now we’ve Built a 4 bed with nee kitchen, extra bathroom which was a lot cheaper than moving back into the area.

our take home pay is 2k (after pension sacrifice etc) more than yours and can comfortably afford to “keep up with the Jones’s” around here

The children have at least 3-4 after school activities such as football, gymnastics, girl guides/scouts, dance, swimming. holidays, general lesiure/social activities to be part of the community that you are striving for to live in an area with good schools

If I were you, I would go for the £550k houses. Do it up as nice as you can with new kitchen, bathroom if they need modernising. And wait a few more years when you can increase your income

[Mum23amazingkids]

That’s a very low income for such big mortgage . I think you will be stretching your income to much and I would not dedicate 2 k on mortgage alone on less than 5 to 6k a month , think about council tax , insurance , utility bills , that alone will add another 1k . Can you really then survive on 1k for food travel and all expenses ?

[TooManyPlatesInMotion]

No. And your wife sounds v unreasonable.

I can see the pount in stretching yourself to a point, so you don't have to incur the costs of moving again, but those figures are too tight.

[Fwaltz]

Spending over half your income on your mortgage - and leaving essentially no buffer for emergencies and ad-hoc things that inevitably crop up would be a seriously bad move. Your wife isn’t unreasonable in wanting a nice home, but she needs a reality check on what is affordable. Could you move to a less expensive area with your jobs?

[weightymatters73]

@Polledja

thanks for you comments. Our total income is approx £80k but I contribute a massive amount to my pension to bring my gross pay under 50k, to keep the child benefit .
we have both reached the max in terms of our income, it’s not goin up massively

You need to reframe....

You cannot afford that kind of house on an 80k joint income

We (back in the day) borrowed £350k on a £120k joint income -- its was HARD....interest rates were about what they are now, no way could I have paid back another 90k.

You are in the "£500k max" game at the moment. Your DW and you will need to either 1) earn more or 2) be gifted/inherit some money 3) move to a cheaper area.

[pollymere]

I think you are BU. It sounds like it will put you under huge financial pressure, especially if one of you lost your job or couldn't work. Unless you live somewhere horrifically expensive, I'm sure you could find somewhere with three bedrooms that won't cripple you as much financially.

[CrazyLadie]

Absolutely don't borrow additional money on top of what the bank will lend you, especially as we are not talking about 1 or 2 k!! If you could afford the amount yer wife makes the bank would lend it to you.

[Harrysmummy246]

@Polledja

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

Yes, but you cannot afford that....

Do you not think they're going to ask about 90k?

[tracylamont13]

Hello,

That’s a huge amount of financial pressure. It wouldnt take much for you to lose everything.

Our house is currently on the market so I do understand how stressed your wife is. It’s a very stressful process. But month by month having to make those huge payments will be more stressful I think.

[RavenhairedRachel]

It will be an even bigger strain on your marriage living with no prospect of holidays, treats, luxuries etc. Even bigger still if you struggle to pay the mortgage. I hope you talk your wife into looking at something more affordable.

[menopausalbloat]

This has got to be a joke post, surely?

[Wellillsayitifnoonelsewill]

Sounds like the wife is being a bit of a mardy cow. I don’t think you can win this one because if you buy the house she wants and find yourselves so financially stretched you can’t have a life she’ll be moaning about that. Then if you lose the house you’ll be the bad guy again.

what’s she putting into this mortgage? I saw your deposit and you lending from family. Is it all your cash?

to be honest I’m also a little bit wide eyed at the fact you were “foolish” as a youngster and feel you are “behind” your peers when you are talking of buying a house of those values with savings of £300k. That’s actually well above and beyond what most “normal” people have. Your wife maybe needs to have a bit of a reality check she’s actually quite privileged. The fact you think you can easily lend £90k from family and your wife’s attitude makes me think maybe your bank balance was probably one of the things she was attracted too and now she’s got a tant on cos it’s not working out how she wanted.

[thelinkisdead]

@Anotherturnipforthebooks

@pinkbaglady

My DH and I bring in about £6000 a month and I wouldn’t dream of buying a house over £280,000.

why? Because we’re financially responsible.

This, is where you suggest that people spend the minimum on a house and say they're irresponsible if they don't!

This is also ridiculous because we bring in a similar amount and our house is worth more than this, and we can easily afford it without any financial stretch at all.

We wouldn’t, however, upsize to a £700k home…

[whittingtonmum]

I would look again at your pension contributions. Putting away over 1k per month into your personal pension when you are trying to buy a family home on your salary seems quite a lot. I would see if you could revisit your current contribution so that might increase your budget by a bit but not hugely.

I had posted earlier about your wife looking into increasing her earnings if she is the one who wants the bigger house. Now that I realise she is the one bringing in £ 17k I can see absolutely no chance of you both being able to stretch to anything remotely what she is aspiring to. You say there isn't much more earning potential than what you have currently. There's your answer. You just can't do it. You both are simply not bringing in enough money.

For her aspirations she would have needed to embark on a more lucrative career and/or married richer than she has. She didn't so she needs to cut her cloth as others have said.

Also if you say you were foolish about not getting on the housing ladder sooner - surely so was she. Unless she is 18 of course which might explain the lack of maturity around financial decisions.