AIBU?
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 She has become withdrawn and depressed during this process and it caused allot of tension.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?
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posygir · 18/03/2023 19:34
No way would I do that! I don't actually think it's possible to get a 350k mortgage on 67k, that's a multiplier over 5 which I can't recall seeing in the past 5 or so years.
I, and most people I know, move up the property ladder rather than going straight in for something that's barely affordable. I'd be trying to find something more around 500k and stretching up to 550k.
Tomkirkman · 18/03/2023 19:34
Why is this all on you?
And who says you will only be buying a house once? Tons of people move all the time.
If she wants the more expensive home, she needs to work out how it’s doable. Earn more for example. How much of the deposit did she put in and how much did you put in?
I would find her behaviour really unattractive and I would be considering not buying a house at all.
DedicatedFollowerOfFashion84 · 18/03/2023 19:35
You simply cannot afford a house in the price ranges you’re looking at, particularly if you need to borrow 90k off family. Your mortgage would work out more than 50% if your income, no lender is likely to be happy with that. You already state you’d have nothing left over (less than nothing because you need to factor in repaying the family loan). I think you need to reassess the price range you’re looking at and your wife needs to get her head out of the clouds.
TheRookie · 18/03/2023 19:36
My 'everything else' bills come to £2000 and that is not including spending/treat money, holiday find, savings etc.
That is home insurance, life insurance, pet insurance, car stuff, TV license and subscriptions, gas and electric, broadband, gym membership, council tax and phones.
You would have absolutely nothing left and have to be super careful with shopping, clothes, Christmas, birthdays! Sounds very hard. Our income is £60k and our mortgage is £500 month.
FatAgainItsLettuceTime · 18/03/2023 19:36
You have no give at all in your budget for interest rates going up, big maintenance costs, a pay reduction or any other likely risk.
In an ideal world your mortgage payment shouldn't be much above 1/3 of your net income so you should aim for a house where your mortgage payment is approx £1000 per month.
Inthedarkagain · 18/03/2023 19:36
House prices are tending downwards if you look at Halifax and Nationwide data. Rightmove will always fudge their data to make it look like house prices are increasing and land registry data is lagging by at least four months.
There has been banks collapsing this week too, so lending capacity will be tightened. Interest rates have increased in last six months which usually has downward pressure on house prices, plus cost of living will have an effect too. Sales have fallen through too, so might not be an easy move.
Really not a good time to stretch yourself to buy an overpriced house. If you are happy to take the risk then go ahead, but I wouldn't move now unless you need to.
MarvelMrs · 18/03/2023 19:37
No. Because you and your wife will want excess monthly income to buy new furniture, upgrade appliances, save for holidays, the kids will have financial needs which grow as they do. Also if/when the interest rates go up you will struggle to meet repayments.
Secondly don’t borrow from family unless as a last resort.
Whatifthecathatesthebaby · 18/03/2023 19:38
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
But you're not making the most of what you can afford. You CANNOT afford the top end of this budget. You need to borrow another £90k over what a lender will give you. You NEED to look for a property for your max loan amount + deposit, so under £600k. Also your mortgage absolutely should not be more than half your outgoings that's a very dangerous place to be, if your circumstances change in the smallest ways what will you be able to shred from those outgoings because it won't be that mortgage payment.
Inkpotlover · 18/03/2023 19:38
Gosh, do NOT do this. Feeling loved and secure and having family experiences are more important to small children than a big house – how will it be for you and them as a family when you are so financially stretched every month there is no money left for the occasional treat or holiday every few years?
Cosmos123 · 18/03/2023 19:38
Go to a house that is much more affordable. A house where you can easily afford repayments and are comfortable l.
Use the money you save on extra curricular activities and tutors should you need.
The home life and how they are supported at home will.make the most difference, sending them to a 'good' school does not guarantee success.
Jacketandbeans · 18/03/2023 19:38
I would think long and hard about this in the current climate. Where's the fun in living if you are constantly stressed about money and stretched? You will miss the best years of family life worrying about money. I'd choose a slightly smaller house and consider moving in the future if/when your salaries are higher.
PeekAtYou · 18/03/2023 19:39
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
What do you think about that statement ?
I currently live where I do because of school catchment. Once youngest is done with A-levels, I am looking forward to moving to a place where I don't have to take this into account. As the schools are great near here I'm hoping that means I can sell quickly too.
Do you imagine retirement where you are house hunting or would you choose somewhere picturesque, overseas or more remote ?
VivaVivaa · 18/03/2023 19:39
We’ve just moved. Combined salary more than yours (roughly 75K) and a slightly bigger deposit to what you have, although we pay nursery fees still and didn’t have an additional 90K loan. Our absolute top end was 420K and that would have been a push. We don’t live particularly extravagant lives. I think you are completely out of the ball park with what you are considering to be honest.
Cosmos123 · 18/03/2023 19:40
Inkpotlover · 18/03/2023 19:38
Gosh, do NOT do this. Feeling loved and secure and having family experiences are more important to small children than a big house – how will it be for you and them as a family when you are so financially stretched every month there is no money left for the occasional treat or holiday every few years?
100% this.
Your children will be happier with security with less stressed parents.
Show your wife this thread.
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