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 She has become withdrawn and depressed during this process and it caused allot of tension.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

[ThankmelaterOkay]

Savings? You mean inheritance/family gifts. Call it what it is.

Also, won’t you pay a huge amount in Stamp Duty if you are above £625k? FTB relief is wiped if above this. This is your first ceiling. The second ceiling should be £450k as you should have some of your cash in cash LISAs. Unless you are nailing the stock market…

Go for houses at £450k to £500k. Offer £450k top. Use the LISA cut off as your reason for a ceiling.

[Zanatdy]

100% don’t, it’s leaving it too tight. I take home £3400 and didn’t want to risk a 250k mortgage, as the repayments are high now and rates could increase. I decided to rent for another year, keep saving where I can (thinking of taking a second job). Don’t push yourself to the max in this climate

[Hellybelly84]

We earn more than you as a couple and bought our house a decade ago for about half of what you are planning to spend. Yes house prices have ofcourse gone up in that time (ours has doubled) but by no means do we have alot spare at the end of the month.

Just a few of the hundreds of things you need abit of extra cash for:
Holidays
Days out
School Trips
Childcare if needed/holiday clubs
Clothes/uniforms kids constantly grow out of
Christmas/Birthdays/Easter
DIY for the new house
Furniture for the new house
Any other work the house needs
Some savings in case the boiler breaks/appliances break/car etc etc etc

Everything is going up and even when inflation goes down, I cant see companies putting all the prices down again to what they were.

I really wouldn’t leave yourself financially crippled and without any money to actually live your lives for the sake of a ‘dream house’.

[SofaSpuds]

We have a joint income of more than double yours, and equity in our house of ~220k so similar deposit, and there's no way I'd but a house for 700k! 550k would be my absolute top if I was even thinking of it (which I'm not). You need to be realistic, don't stretch yourselves so you end up at the pin of your collar every month just to pay the mortgage.

[SofaSpuds]

But = buy

[pinkbaglady]

@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!

And I stand by that. Spending £700,000 on a house is utterly irresponsible when your income doesn’t afford it.

mortgaging yourself to the eyeballs is an absolute enigma to me

[pinkbaglady]

I also have a fair amount of friends who earn similar to me and my DH and are struggling massively with mortgages along with other financial commitments. It’s nothing but worry for them.

so I’ll stick to my £280,000 budget thanks!

[KtBb]

I would think twice …. We bought a 600k doer upper- we will need to borrow another 100k to do it up🫣🫣
our income is 5500 per month and we had £200k deposit. Our mortgage is £1900 per month- we have both taken on extra work! Cost of living will get worse. We bought this property for similar reasons- schools and nice area and we live in a very expensive city. Try to find another way or if you’re handy - a doer upper like us. We’ve just been installing a new bathroom ourselves and found that the floor is rotten and needs to be replaced- property is a money pit!! Good luck!!

[Bananagirl23]

Sounds like you could release some of your salary from your pension pot in order to help you afford more? Im another in the minority thinking if your dream house is within your reach then you should try & go for it - I personally would rather enjoy day to day life in a nice house and good area and sacrifice the expensive holidays/haircuts etc. but the bank will only lend you what they think you can manage anyway

[Anotherturnipforthebooks]

@pinkbaglady

I wouldn't buy a £700k in ops position either and I think just one person in the whole thread have said they would.

Luckily, there is a vast middle ground between spending less than 15% of your net income on your mortgage (which it sounds like you do) and more than 50% which is what op is suggesting.

I find it bizarre that so many people on this thread think these extremes are the only options.

[pompei8309]

@amiold

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?

You’re ridiculous now , on that income you can easily afford more than than , you just not brave enough

[soffa]

You have a combined income of 250k, a 200k deposit, and wouldn’t buy a 700k house??

This is equally mad!

[soffa]

where are all these people living earning high incomes but where a house is available for cheap?

[DeadbeatYoda]

No way. Imagine if the interest rates head up to 10%. Heavens no.
We have a £350k mortgage on £100k joint income and it's not easy. By the time we've paid our bills and taxes we don't feel like we have a lot of disposable income. We do not drive nice cars. We do have 3 teens.

[Isinglass20]

And I don’t believe it

[Anotherturnipforthebooks]

@soffa

where are all these people living earning high incomes but where a house is available for cheap?

I've been wondering this too.

[DanceMonster]

@soffa

where are all these people living earning high incomes but where a house is available for cheap?

We live in a cheap town in the East Midlands, income £200k

[TrinaLowsln]

@pompei8309

You’re ridiculous now , on that income you can easily afford more than than , you just not brave enough

Exactly this, where I live you wouldn't even be able to buy a cardboard box for 300k.

[Mandyjack]

@elprup

I’m confused - the OP says they will have £1900 after mortgage to live on, which sounds like a decent amount to me?

Sounds like a good amount to me too but I guess with a big house your council tax will be high as well as your energy bills.

[Mandyjack]

@DanceMonster

We live in a cheap town in the East Midlands, income £200k

If your a high earner would you not prefer to have a better house?

[petmads]

you say you will only buy a house once what about when youre kids leave home get wed etc you wont need a big house for just two of you and you wont get back what you paid for it im sorry youre wifes reasoning is wrong. even though the kids will have left youve still the same mortgage to pay also how you going to live when you retire as you say youd have newt left if you went down this route. i would go for a decent sized affordable property that will last till youre kids are grown and moved on

[Somethingneedstochange78]

It's not just about the mortgage though. It's the upkeep of the home and the higher council tax they would pay to live in that area. All needs to be taken into consideration as well. Even with the mortgage more or less paid off. They will only just be scraping by.

[DanceMonster]

@Mandyjack

If your a high earner would you not prefer to have a better house?

I have a nice house. It’s lovely. 4 bed detached with a large garden, 3 reception rooms. Cost £295k 5 years ago. We don’t need anything bigger, and we have enough spare cash to make it exactly how we want it.

[DanceMonster]

as I said above though, it was a financial stretch when we bought it. Our income has increased hugely since then. Still happy with the house though.

[Bananagirl23]

@petmads

you say you will only buy a house once what about when youre kids leave home get wed etc you wont need a big house for just two of you and you wont get back what you paid for it im sorry youre wifes reasoning is wrong. even though the kids will have left youve still the same mortgage to pay also how you going to live when you retire as you say youd have newt left if you went down this route. i would go for a decent sized affordable property that will last till youre kids are grown and moved on

I’m sorry but I don’t understand why they wouldn’t get back what they paid for it? If they sell up and move into a smaller home once the kids have left home couldn’t they potentially have enough to live mortgage free? Why by your retirement house now?