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 She has become withdrawn and depressed during this process and it caused allot of tension.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

I must be mad because I don't think that's so stupid... but I live in London and everyone is mortgaged to death.

We bought a £655 k home on £100k joint. We had about a £200k deposit. There's not much left every month but we aren't broke. Our costs will go down when the youngest goes to school too. Only 2 more years of nursery to go!

£700 is pushing it but maybe you could find a fixer upper at the lower end that you could do up over time?

I havent seen any of those, one poster said their joint income is 110k and wont consider houses over 300k. Thats not too far off 3x income which once upon a time would have been the standard borrowing. Nothing that astounding.

Even if you could loan 90k from family (which frankly you can’t afford to pay back so who will you screw over for that much?) I’d be amazed if the bank would loan you the rest and if they did you would be mad to do this. One internet raise and you’re totally screwed. Our mortgage has gone up £400 over recent months and utilities have doubled. We are “lucky” we can afford this, if we over mortgaged ourselves like you plan to we would be bankrupt.

Unless you’re in your 60s or something and this would be your first home, this is risk averse in the extreme 😳

We have a higher household income and a much lower mortgage and yet we still don't have loads of disposable income (we're absolutely fine, have a good quality of life and are not having to worry but we can't go on lots of foreign holidays or eat out much). Children are expensive and become dramatically so as they get bigger - my teen DC are a serious drain on resources and we haven't reached driving lessons and uni yet!

Iirc loans or even gifts from family are viewed suspiciously by lenders, especially if they're immediately prior to an application rather than an inheritance etc. Our broker explained this is because lenders view this as a sign that you haven't managed to save it yourselves and that family members may want relating or try to stake some claim in the home at a later date.

I genuinely don't think you can afford this (or should want to). I get your wife's disappointment and she will need to accept the dream can't be realised. That can be hard but any lender is likely to say no to this proposal. Worth speaking to a broker to hear it from someone else and the reasons why?

That was decades ago though.

To me, that level of risk aversion seems ridiculous when you’re working hard enough to earn that kind of salary.

I also live in an area where that wouldn’t get you more than a 1 bedroom flat!

My house was £750k, we had a similar amount in deposit and the rest is mortgage. We bring home approx 6.5k per month (net). I would not fancy it on less monthly income!

I sympathise with your wife - it’s hard to not be able to buy something you like and in principle I agree with stretching for something great - we lived in a house I had no love for for about 7 years before we bought this one (which I do love).

But I think she is wrong to say you only buy a house once, most people buy more than once! Perhaps your next house will be the dream?

Does this have to be your 'forever home' ?

I would never agree to this based on your calculations. To put it in perspective we earn £90k and our mortgage was £220k at a push.

Cost of living is mental!

When myself and my ex broke up I didn't think I could afford to buy anything, inspite of a healthy deposit. But my mortgage broker worked his magic, and I managed to get approved for a smallish mortgage. But in doing so it meant by budget was low, so I looked at where I could afford to live and moved to a whole new county. Buying a house is a dream for so many, it maybe time to remind your wife your in a fab position with a big deposit, but she needs to compromise. I wouldn't sleep taking on that kind of mortgage with that income. There's no wiggle room for emergencies, home improvements, or general fun. I hope she sees sense as it's such a terrible time to be over stretching yourself.

@pinkbaglady You don't live in the south east then? Because you simply wouldn't find a house for that little cost.

dont do it, It’s not worth the stress that will follow.

Big houses have bigger bills and there’s so much uncertainty right now, who know is costs will rise further.

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 the houses she wants, she cant afford

@bellac11

Assuming a min £30k deposit on a £300k house, that means a £270k mortgage on a £110k income, so quite a bit less than x3

Christ, I wouldn't be taking on that mortgage and our household income is 4x yours.

We had a £280k deposit on a £500k mortgage, with a £90k income. It's worked out at £1k/month which is affordable but I genuinely wouldn't want to go much higher because we have a really good quality of life- it's all about balance. Once day to day life is paid for we have £700 left over for long term goals- holidays, spending etc. I'd hate for that money to be going into housing costs, which it could very well do once our 0.9% fixed rate ends and we go on the svr. We've got 4 years for interest rates to come down or to save as much as we can to reduce a chunk of mortgage when we remortgage. You really don't want to max out your borrowing power and tie yourself to huge monthly payments potentially going into a recession, you just don't.

As others have said, you won’t get approved for that. You’ll fail affordability. And I can’t believe you would take money off family when you have no means of paying money back surely, with that much disposable income left over each month?

You have an income of £268k a year but wouldn't take on a £350k mortgage?

Madness. We earn more than you (not in a ner ner ner ner way) our joint earnings are nearly 90k, we were looking to move, we'd need to borrow 225k for the houses we'd like (4 bed family home) and I'm just not willing to take the leap right now. House prices and interest rates need to come down and our salary needs to go up before I'll consider taking on a mortgage for over 200k. Our ltv would be v good, we'd get the best rates, but nope.

I just can't understand why you'd even contemplate this, not only is it a huge risk, you will have very little money for anything else. I think your wife is living in la la land. Don't do it, even if a mortgage company is mad enough to lend you that much.

3bed house in Kent for £280k

Why are you only to buy a house once? There is a reason that it is called 'the housing ladder'. Start small and work up.

Forgot to add when we applied for our mortgage we took a mortgage of 295k knowing we could comfortably pay off the max allowed each year on top of the monthly mortgage payments plus all the household bills factoring in leeway should one of us lose our jobs or should bills etc go up. We put down a £100k deposit and our earnings came to 200k. And we still had to go through affordability checks etc and that was before things got more stringent - I wouldn’t have wanted to take on more than that, it was top end of what we wanted to borrow because you just don’t know how your circumstances might change.

your wife may want the houses but will she want them if she has literally no money left over to have a life?

I feel for you because I was like your wife. I wanted my dream house in my dream neighborhood. I was determined. It was never going to happen because of the money required but my mindset has always been anything is possible 🙄. I dragged dh to viewings, I daydreamed, obsessed over it, I talked to him about it constantly. He was afraid to outright tell me no, and I think you’re going to have to tell your wife no, gently but decisively.

The numbers you have laid out in your post…you’re in for a world of pain and anxiety and living on the edge for years if you buy at the high end. Your wife must compromise, she has to realize that.

When I finally accepted and was happy in our little cottage, a house went up for sale in our neighborhood (which I dismissed as too much work and of course not good enough for me, not in my dream neighborhood even though ours is very wonderful, I realize now what a blockhead I was) but my husband insisted on buying it as he saw it ticked most of my boxes for a dream house. Well, that was genius of him, because not only were we able to afford it, and it’s now paid off, it really is my dream house, with a little work and appreciation on my part.

How are your outgoings £1,600 per month excluding a mortgage?!?!

How could you afford to pay back your family if they could and were willing to loan you that amount of money? How long would it take to repay this? What would happen if an unexpected bill arose? Would you pay that or pay your family when there's no wiggle room?

How would you explain to your potential mortgage provider where this additional £90,000 is from? If you're honest and say it's from a relative, they will need to prove where they got the money from. And if you're completely honest and say it's a loan and not a gift, they will also question how you'll afford to pay it back on top of all of your bills and mortgage repayments.

Do you actually NEED a house of this high value? Your first house does not need to be your dream home that ticks all the boxes. That's further down the line.

I'm almost certain you wouldn't raise that amount.

Plus you'd have to declare the £90k loan as part of the affordability process.

Is this a reverse?

Yabu. We have a joint income of around 130k or more depending on the year and also had about 250k equity and we didn't feel comfortable buying anything over 550k. Everything is so unpredictable at the moment, everything is rising, and jobs are never guaranteed.