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 She has become withdrawn and depressed during this process and it caused allot of tension.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

[axolotlfloof]

The important issue is to buy well.
Whether you are spending 70k or 700k on a house you need to be able to add value.
I would be looking for an auction (can be tricky but not impossible with a mortgage) or property that needs work.
You can't afford to spend top dollar. What happens when interest rates rise?
My sister bought a repossession recently where the estate agent didn't have a key to the room with the boiler (so couldn't confirm whether it worked or was even there) and there was a roof leak.
They got the property for about £60k less than market value. It cost £80 for minimal roof repair and the boiler is fine, and has been serviced.
There are bargains out there if you are prepared to do a bit of work, and accept some risk for the lower price.
You can't afford your wife's plan.

[Notjustabrunette]

My balance of my mortgage is 70k(on a house valued now at 550k) during the pandemic we were both unemployed. If we’d had a big mortgage we would have been totally screwed. My advice would if possible to get a mortgage each of you could afford to pay on your own. I would also like to note that the reason why our balance is so low is because we have been over paying on ours for years as we didn’t overstretch ourselves.

[bibbybox]

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.

Pushing it? 🙄

[Sainte]

Buy a house but not in that price range. If possible have a spare room to rent out if ever needed. This allows me to sleep at night.
Hopefully your wife is not intellectually challenged and understands one doesn’t get the dream house at the first or even second purchase.
Of course we all want our dream house now. The grown ups amongst us understand this.
If you buy a home you can’t afford, it will become such a burden and mental health for all concerned including children will be a huge problem. The adults may survive but children growing up in stressed homes - well they have difficulties all their lives.
Get an affordable house, but get on the market. Good wishes to you all xx

[tracylamont13]

@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

Also, what about the 90k loan repayments to family? How much would that be? Would it be awkward being in debt to them? What if you couldn’t pay?

[FancyFran]

No one is offering 5x salary mortgages anymore. I have a six figure salary and was only offered 3x.
We dropped our budget by £200k and we have bought at just over £500k. The house is an ex rental that needs some love but the location is pretty and it is very saleable. We will keep it a few years but it is low risk. We lost our home in 2009 due to a mortgage that almost doubled. It had a profound effect on our children. With high rents we spent years as tenants as it was hard to save as well. Don't be pushed into risking everything. It is just a house. Buy what you can comfortably pay for and have nice fixtures and fittings. Shop at Marks, live a little. My happiest friends have three beds, lovely holidays and nice cars. Your wife is being unreasonable.

[Caelan2018]

You won't get the mortgage so it won't happen ... and it's crazy to put yourselves in that position you have ti live within your means we can afford to pay 1200 a month on a really nice house out own self build bit we can get same size house built to then key finish for 160k less I want a life outside of the house and we also have 4 boys 3 still at home who haven't started school yet

[SpideysMummy]

Our mortgage is half that, on the same(ish - DH is self employed so some months it’s higher) and we really struggle. And our utilities are really low (tiny house), yours would be significantly higher and on a presumably larger house.

[toxic44]

Have you asked your wife why having such a house is so important to her that she wants you both to live hand to mouth with no safety net? The stress of long-term financial insecurity is exhausting. Is that what she wants for you and the children? Repossession isn't funny and that would be the path ahead even if you got mortgage approval. If her answer is yes, that's an acceptable result, can she tell you why?

[LaDamaDeElche]

Your wife is wrong that you only buy a house once. Savvy people buy a house they can afford and make money on and sell that one and possibly another to move up the property ladder to their dream house. Unless you're rich, have family help, or live in an affordable area, it's very rare to buy your forever home first time.

[MrMarkham]

We have a house around that value and 500k mortgage, it's £2,500 a month, my salary is 65k and my partner's is around 80k but it's still a bit of a squeeze after bills on top. I wouldn't do it in your shoes.

[Meandfour]

This is an absolutely terrible idea. Look for houses you can afford.

[TrinaLowsln]

@MrMarkham

We have a house around that value and 500k mortgage, it's £2,500 a month, my salary is 65k and my partner's is around 80k but it's still a bit of a squeeze after bills on top. I wouldn't do it in your shoes.

Ours is basically exactly the same as this (a tiny bit less but income is also a tiny bit less) and we don't find it a squeeze at all. Household income 6.5k, mortgage 2.2k. We still have 3.5k left over after mortgage and bills. I'm genuinely interested in those at this level of income who feel squeezed.

[mylifestory]

Apply for the mortgage and see what happens, then your wife can adjust her requirements. Im all for buying a house just once tho, what about stamp duty, legal expenses etc?

[User1438423]

I really wouldn't, with the ongoing cost of living increases. Our income is the same as yours, and a few years ago, we were told we could get a max mortgage of 260k, we had a very small deposit, and we ended up buying a house for only 140k, which was meant to be a stop gap for a few years as we had limited time to move for various reasons. But even with such an under budget house, we have no spare money each month and our debt is increasing exponentially. This is due to food and fuel costs rising, as well as our mortgage has gone up £400 per month. We have had no expensive holidays, only one car, yet we are still in debt and can't afford to move. I'm REALLY glad we didn't take out a £250k mortgage, we had no way of knowing about the rising costs ahead, but you do. We would have had the house repossessed if we'd stretched ourselves.

[Sheruns]

Jointly we earn 90k plus 6k in child maintenance from my ex. We bought a 263k house with a 40k deposit last year. By the time childcare and pension contributions are sorted, we don't have much spare cash (but we are not struggling). I don't see how that could possibly be affordable even with your big deposit.

[Lemonademoney]

Don’t think you’ll get approved for this plus there are all of the associated costs with a more expensive property. Have you factored in council tax increases? More expensive utility bills? The cost of maintaining a larger property?

[Somethingneedstochange78]

Don't forget you will be in a higher council tax band and interest rates have gone up and continue to go up. There's not much point in buying a house in a fancy area if you can barely afford to live. You don't want to be just scraping by just for the sake of having your dream house. Especially now with the COL.

[QuintanaRoo]

No you’d be insane. Kids get more expensive as they get older (bar childcare costs), clothes, school trips, activities, wanting stuff. Cost of living and inflation is likely to go up. What if interest rates are higher in five years than now? What when your car needs repairs, your boiler breakers, etc.

you have to cut your cloth, yadda, yadda, yadda. I live in a three bed semi, would I like to live in a four bed detached? Of course. And I could actually afford it better than you can afford a 700k house but we haven’t done it. I prefer having money for stuff. Not having to worry about affording stuff within reason is priceless. I’d never borrow more than 3.5x salary.

[Vynalbob]

I'd take the line that the ideal home wouldn't be a forever home it would be an expensive rental as you'd recoup little when you get stuck.....as well as the added aspect of possibly poisoning relationships between yourselves & the loangifters.

Maybe there someone in her family that could help with getting your OH to look at things realistically.

[Dragonsmother]

OP please sit down together and do a bid get plan. Do you live in a part of the country where house prices are expensive?
You need to cost everything down to the last penny.
Buying a house isn’t simple as “we can afford the mortgage” a house needs maintaining. You need to make sure you have money to pay for the emergencies.
As kids grow up they cost more- clothes, food, clubs etc.
You need a 5 year plan and cost this up.
if one can’t compromise then maybe they need to come up with the extra funds?

[donttellmehesalive]

Another one thinking that plan is crazy.

4 x salary plus 90% of your savings.

Anything more, particularly in the current climate, is reckless and puts your financial security at risk.

[nuttynet]

Our household income is nearly double yours

We are on the property ladder already and so have savings plus some equity

We cannot afford a mortgage that high

Remember stamp duty will be £22k

[TrinaLowsln]

@nuttynet

Our household income is nearly double yours

We are on the property ladder already and so have savings plus some equity

We cannot afford a mortgage that high

Remember stamp duty will be £22k

Your household income is 160k and you can't afford a mortgage of 330k? Which would be just over twice your income?

[TrinaLowsln]

@TrinaLowsln

Your household income is 160k and you can't afford a mortgage of 330k? Which would be just over twice your income?

Apologies, I thought OP earned 80k. So your household income is actually 134,000, which is about the same as ours. Surely a 330k mortgage is more than doable on that money nonetheless?! Ours is 448k and that's totally affordable (wasn't anywhere near the amount the bank would have lent us, either).