Would you take on the mortgage?

[CheckofSense]

We’ve found a house we love, currently renting. We’ve been declined for a high street mortgage due to some 5/6 year old credit issues. Everything done well for 4 years.

We can get a subprime mortgage fixed for 2 years when we can switch to high street lenders.

Due to DHs age, if we don’t do it now, we will struggle as he is 51.

High street would have been £1690, but sub prime is £1930 pm.

My income is £3400 pm, DH is £2300, £100 Child Benefit, Board from DD £200pm (not keen to budget this but unlikely to change in the next two years).

Bills account:

Category
Bill Type
Amount
Housing
Mortgage
1,930.00
Utilities
Gas & Electric
214.00
Utilities
Water
54.00
Council
Council Tax
182.00
Media
TV Licence
14.95
Communications
Mobile phone
42.08
Communications
Mobile phone
176.82 (DD pays £80 of this)
Fitness
Gym membership
53.28
Fitness
Gym membership
53.28
Subscriptions
Amazon Prime
8.99
Subscriptions
Amazon Music
10.99
Subscriptions
Netflix
12.99
Subscriptions
Disney+
8.99
Entertainment
National Lottery
42.00
Insurance
Pet insurance
103.63
Savings
Premium Bonds
100.00
Finance
Home insurance
15.77
Health
NHS prescriptions
11.45
Health
Opticians
18.00
Family
Account fee
15.00
Savings
School lunches / bus fare
90.00
Finance
Retail finance (DFS)
30.00
Weekly (avg monthly)
Child pocket money
43.33

Total: £3275.00

Unfortunately our pet is likely to pass soon, so insurance will stop and we can cancel the lottery payments if needed. Gas & Electric likely to go down now we’ve cleared a significant debit balance and new house would be more economical.

This leaves all of DHs wage for food, petrol, savings and discretionary spends.

We had a £1600 mortgage on about £4000 combined income plus we had childcare to pay so I think it sounds fine to me. It was a tight couple of years until they went to school, our income went up and we could also remortgage onto a better deal. If you pay rent of £900 and have been saving £1000 then seems clear you can afford it

Mortgage aside, what’s you full financial position? Do you have full emergency fund set aside (not your deposit)? How will you handle one or both of you losing your job? Pension provisions?

Pensions are ok, average, not amazing. Mine more so than DHs.

Emergency fund, honestly no, not after paying the deposit etc. but it’s weighing up getting our how house and having no mortgage once retired or renting forever.

I know you can never rely on it, but we will more then likely receive some inheritance over the term of the mortgage.

We are happy to sacrifice holidays etc for the next couple of years while we get back onto our feet.

As said there's an awful lot of wants which are not necessarily needs that are being paid out of your budget now.

In a lot of people's circumstances, no matter which age group when purchasing a property there will need to be cut backs, i'd go through those wants and see exactly how much I really need/want those.

At the end of the day…only you/DH know what risks you’re prepared to take…and whether or not those risks are outweighed by the benefits.

Good luck whatever you decide.

Go for it!

Haha yes, but a few MN home truths can help guide a mind 😂

I would go for it but very much cut down on the subscription stuff, gym etc, get a 15 year mortgage if you can manage it to tie in with your OHs retirement age

Absolutely, that list is exactly what we are paying now. Not what we have reviewed if we go ahead.

You could've saved an additional £2k over the last 3/4 years instead of throwing it away on lottery tickets.
Also, if your pet is unlikely to be around much longer you could maybe reconsider the exhorbitant insurance - £1200/year is insane.
Sorry OP but your financial priorities still seem a bit out of whack and that won't be helping your case with lenders.

You appear to have a monthly household income of £6k and current outgoings (bills) of approx £2300 which will rise to £3275 if you go ahead with buying a house, leaving you £2725 to cover food and petrol.

You have a one mobile phone bill of £176.82, two gym memberships totalling £106.56, national lottery at £42, various streaming services and prime totalling £41.96 and premium bonds at £100 which all totals £467.08 of non essential spending where savings could be made. I understand you can't bring all these expenses to zero but £176 for a mobile phone is extravagant by anyone's standards.

I don't wish to be insensitive but unless your pet insurance is currently covering the cost of ongoing care you should cancel that now.

I think you have more than enough money but you do need to prioritise how you spend it.

£80 of the phone bill is adult Dads, she pays that (but it is included in the total of our bills).

Dog has multiple medical issues and we have made a couple of claims this year. But we are now probably taking weeks rather than months and it will cover the end of life care so would be mad to end it now.

Over £200 a month on mobile phones !

This i think this is an amount that's too high for comfort. It leaves very little wiggle room for savings? What about car costs or transport I see nothing about that in your budgeting only a very small monthly amount of £90 for school lunches and a bus pass. What are car insurance /leasing costs? If you own cars outright are you budgeting a significant chunk to cover purchase costs for replacement if something happens?

So your combined income is 5800 k a month and you’ll still have approximately 3900k left after paying the mortgage?
Er… yeah, I think you’ll be fine!
I pay 38% of my income to my mortgage and have waaay less than that left over. Which is shit. But you will be fine.
DO get income protection insurance though. Everyone who can get it, should.

On those figures. I'd do it. There is a lot of discretionary spending that could be cut back if push came to shove.

£80 of that is adult DDs that she choose and pays for (but got a discount by keeping them all on one bill).

Maybe. If you can afford it for 5 years and the 2 of you are a strong couple then yes. You have no idea what the economy would look like in a few years time. Or your/ his health. So you could get stuck.
so it’s a financial gamble.
also. Why would Your DH struggle to get a mortgage at 51? We have just remortgaged and my DH was that age. In fact he was unemployed for much of the last few years.

you need to consider whether you can do this on your own if needed

that’s the real test.

It's exactly one third of their joint income and therefore eminently doable.

Remortgaging and taking out a brand new mortgage is slightly different though and it would be the term in which we would pay it over would be the issue.

We’ve been married 20+ years so don’t see an issue with the relationship.

However much money you have, you're needlessly pissing away quite a bit.

Why so many subscriptions, do you really watch them all enough?

Your mobile phone and gym costs are ridiculous.

What is the family account fee?

Is your pet insurance good value and how likely are you to need it? I cancelled the cover for our 18 YO cat because it had a high excess and only covered 80% of the cost so not worth the premium.

She's also vet phobic such that it is hugely stressful all round for her to go to the vets so if she gets seriously ill, it's not kind to put her through repeated visits and treatment.

I have an income protection. It’s about £60 a month. It’s well worth every penny if it goes pear-shaped.

If we can get it for anything like that cost then we definitely will.

Subscriptions definitely need a review.

Gym is our only real social vice, we don’t drink, smoke, vape we’ve both lost a significant amount of weight and changed our lifestyle in the last 12 months so honestly that would be the last thing we would give up.

Phones, you are right, we won’t upgrade for a few years once these three lines end this year. £80 is DDs, she pays that and choose that contract.

Vets, I answered above, he’s had quite a bit of treatment this year but we now have weeks, rather then months left and they will cover end of life care. So would be daft to cancel now.

Account fee covers annual family travel, mobile phone insurance and break down cover for all of us.

My critical illness cover is circa £140/month. Took it out at a couple of years older than your DH plus I already have high blood pressure & cholesterol (treated) and I ride a motorbike. All things considered, it's not too bad. Don't write off the idea of cover for your DH without looking into it.
Other than that, go for it. Sounds like you'll be able to make it work.