Can we afford dream house?

[BatCrapCrazy]

We have found our dream house. It's so ideal it's unreal. It's on the market for 195000 but are open to offers. I would say they would easily drop to 190000 if not, 185000.
We have 20000 to put down as a deposit (although 8k of this is borrowed from a family member but he is in no rush for it back).
Our mortgage would be around 850 pm.
Our combined incomes is £2900pm.
So our outgoings would be:
mortgage: 850
Council tax: 170 (estimate)
Water: 70
Energy: 160ish
Sky and TV license (incl broadband): 75
Mobile phones: 70
Car insurance: 45
Sofa finance: 40
Gym membership: 20
Total: 1500(I think)

Our diesel and food shop is around 550-600pm

We are planning on paying back relative 300pm

Is this realistic or are we stretching ourselves too far? We have 2 properties which we rent out. After the mortgages, there is around 600pm leftover but we overpay that on the mortgages to get them paid off sooner. We simply do this with a bank transfer every month so if we had a bad month, we could get away with not doing that.

I'm thinking we can do this. DP is sceptical

It does sound possible, can you check the actual council tax cost?

It's more than I would personally want to pay percentage wise but it depends where your priorities lie, do you have children/Childcare costs etc to factor in? Because £500 disposable income a month is pretty good if there's only two of you.

Oh and have you stress tested if interest rates went up to 5%?

We have 2dc but no childcare costs by the time we move. DS is starting school in April.
We have worked our income out on the least that DP will earn. He subcontracts for a company on a permanent basis but they let him take time off whenever he wants to do his own work (where he earns more money). He usually works overtime as well so this isn't factored in. And I am due a 100
Payrise in sept and I also haven't factored in child benefit.
The council tax shouldn't be much different to that. My DMums friend lives in an almost identical house in the next street over and she pays 160pm.

I really really want this house. It's everything we've been looking for.

Also if interest rates went up, we wouldn't overpay on our other mortgages which isn't the end of the world.

Playing devils advocate - its always important to think of everything if you can...

If he is self employed/subcontracts how stable is that?

What would the effect on your other two mortgages be if interest rates went up?

Oh and I'm presuming you other two are buy to let mortgages so you wouldn't have any problem getting a residential mortgage for your own home?

Other 2 are buy to lets. Those mortgages are very small so interest rates wouldn't have a massive effect on those.
DP is self employed but subcontracts for a large local firm and that work is endless. He can have weeks off whenever neccessary to do his own work which pays more.

It really does sound like its affordable. Okay if your mortgage and loan costs go up you will have less disposable income, but have you spoken to him about what else he wants the money for?

There's a general view that you shoudnt spend more than about 28% of gross income on your mortgage as good financial management, you're at 29% of your net income so within that "limit". U fortunately it's not me you need to convince!!

Sounds good to me. I'd say go for it!!

He wants the money to save up just incase. Our car is unlikely to last past the next few years. And if we bought the house, we would like to put a new bathroom and kitchen in eventually. DP Is a builder though and his best friend is a tiler so we could do all that on the cheap. We are getting married in 12 months but the majority of that is paid off. Just need to pay for my dress and bridesmaids dresses now.

So is it "just in case" as opposed to a decent quality of life?

How can we help you persuade him?

You could do it,it's similar too ur arrangement but be prepared In a good few years you may settle Into your lovely home and get used to it, then realise your low disposable Income. If you know your situation will change that's ok but train your brain to be on frugal terms

We have considered that. I'll be a qualified teacher in 2 years so (hopefully) I'll be earning more than my pittance Learning Support Officer wage by then. The more DP looks at the house, the more he comes round to the idea :)

I think it sounds affordable. Good luck.

You forgot house insurance, mortgage protection insurance

mortgage protection insurance = waste of money

I assume you are paying tax on the rentals

Yes tax is paid on rentals. I deducted that with the mortgage payment. Will price up house insurance

Sounds very doable and your income may go up anyway. Seize the opportunity. You could also give up things like over paying and gym membership if you needed to or take a second job.

I think I've persuaded him! He's phoning our mortgage adviser in the morning! Yippeeeeee

Sounds affordable.

Go for it! Good luck.