Looking to get a mortgage at x4 income- sensible or stupid?

[miggles33]

I am looking to buy a house that is for sale for £260k. I have a substantial deposit so would need a mortgage of £130k so 50%ltv. This would be x4 one (my partners gross income). This would mean mortgage repayments are about 1/3 net pay at the moment. We are first time buyers and have done a lot of research. I'm a sahm. We found a house we loved but do not want to make bad financial decisions. My partner is a risk taker and not financially cautious so it's up to me to decide really. What do you think wise people?

It all depends upon your priorities really. My home is super important to me and Id rather be home than anywhere else do I would go for it!

The mortgage will go down albeit slowly so that's something to look forward too

Wont your mortgage be granted on affordability.? If your supplier thinks you can't afford it you won't get it.??

How would the mortgage repayments compare to your rent? A third of net income sounds do-able to me. Are you going to opt for a fixed rate? ( I would).

Depends upon all your other outgoings. If you've got a lot of other financial commitments each month I.e cars on finance, debt to pay back (I'm not including childcare as you're a SAHM, so assuming no other childcare costs) then this would make it harder to find the money to pay back the mortgage.

If you have no other commitments so have 2/3s of your income for bills, food, entertainment etc then that could be more do-able.

Doesn't sound unreasonable to me. For example, £600 of £1800/month take home would be fairly normal rent to me.

Is there only one income in the family?

Sorry, I mean are you likely to go into work at any point (that you've planned)? Would that make any difference to how you see the value for money here?

Have you got a lender who will lend 4x? It sounds unlikely to me.

Not unreasonable but firstly depends if the bank will lend you that much; do you have an agreement in principle from a mortgage provider?

That's the norm for plenty of people, DH and I probably spend a third of our net income on mortgage but we choose to overpay quite a lot rather then save separately so we could revert back to 'normal' payments if needs be.

Do an incoming/outgoing spreadsheet and if the sums work then fine but factor in what might change in the future.

Yes we have a mortgage in principle offer that is actually higher than that but I will only consider x4 maximum. There are no other major expenses as I am a sahman so no childcare costs and no car or debt. If we did get a car or pay for childcare it would be because I return to work so would finance it. I want to base it all on one income though so that if I have another child we are fine.

*Sahm I meant

I think ours is 5.5x our joint income and it is a lot but we can afford it. It is about affordability these days, not x salary.

I don't think we even worked out what ours is in terms of multiples of salary. We just looked at whether we could comfortably make the minimum repayment every month.

I imagine that rent would be much more expensive.

think it's doable and the bank won't be too worried because of the big deposit.
They may want you to get income insurance, though, particularly as it's only one of you earning atm.

Hi - I would suggest you take a real look at the costs of the house and what you like to do. I spent 10 unhappy and stressful years without holidays and worrying about the bills when my mortgage was 4x our income. Granted we both had long and expensive commutes and some debt, but I genuinly feel like I lost a decade of my life to money worries.

The repayments would be about the same as our rent. So we have enough for bills, food etc but not luxuries or spare money really.

I am a bit worried but I'm financially cautious - but love the house! There is no commute for my partner- walk or bike and no debt.

You should factor in house insurance costs too and possible repairs. It's more costly than renting.

As long as you buy well your mortgage payments should just go down, whilst rents are just going to keep rising. Is it in the SE? If so I wouldn't think twice.

No not in the SE but a very desirable area of a city where demand is high and lots of buyers to each decent house.

Whether or not 4x income (and the mortgage payment being a third of your monthly income) is a different consideration depending on what that actual income is.

Your post suggests your partner's salary is £32.5k, which isn't a huge amount for a family and the amount left after the mortgage payment could be a lot less than if he earnt £100k and you were looking at a £400k mortgage.

Have you done a budget, with all incomings and outgoings (don’t forget irregular annual expenses and some spare for contingencies) to see if the figures add up? There’s a good budgeting section on moneysavingexpert with a calculator.

You could always find some part time work if you found you needed to supplement your income a bit, I think the security of owning your own house is worth it if you can find something.

We have just bought at 5x joint salary. Yes things are tight but I really couldn't care less. We are lowish earners and don't have the money for luxuries at the moment but I know things will get better in the future, we both have a lot more earning potential, and hopefully we have bought well and our mortgage payments will go down as well.

What is affordability like? A single person with no other commitments can even go 5 x salary on the 32k per year. If you have kids a more reasonable figure is 2.5 - 3 x if he's the sole earner.

Our mortgage was 3 x jt salary but we would never have gotten so high if one of us was at home.

Could you cope if rates went up? Also the older children get he more they cost.

Sounds very ordinary to me.