Affordability

[Masketti]

A house has come on in our village which rarely comes up. We had no intention of moving but this location is perfect. It would need doing up and an extension but not immediately.

However I'm part time £25k moving from permanent to 1 year fixed from March. DH is £23k FT with no prospect of improvement. Our childcare bill is £10.5k a year which will only go down marginally in Sept when DD1 goes to school. I'm starting my own business but there will be no accounts for a year. I'm estimating my before tax earnings to be £8k a year. We have a 1.99% offset till June with £71k in the offset.

Is there any chance we can afford a £300k house? A neighbour's house sold for £285k recently but I found that surprisingly high. I'd expect around £270k for ours.

DD2 won't go to school till 2019 so childcare bill will continue till then (very limited options for change or I would & am actively looking)

Which mortgage companies should I look at to ascertain if there's any chance of getting a mortgage? I know we struggled with affordability when we fixed 2 years ago on the same figures.

It could be our dream family house in our perfect location or I'd just forget about it. Thanks for your help.

Have a play on some of the calculators on line. What's the offset - equity? So would have £70k deposit and need £230 mortgage.

Our mortgage was £260 and we pay £1100 a month of that helps.

I have and it says £717 on our current rate which is affordable but I wonder if any other company would actually offer that rate (1.99%) because of our salaries?

We could port the mortgage plus £5k at the existing rate and potentially make up the difference with our offset savings.

I would speak to an IFA. Ours has always been superb at finding mortgage products and ways a d means of making things happen. He has access to a lot more products than advertised.

I've used London and Country in the past. Would they be helpful again do you think?

Have I understood correctly that you are moving from a permanent work contract to a fixed term one from march ?If so, I this may well impact on whether you can get a mortgage.

Affordability is not just based on your current interest rate, lenders also have to look at affordability on their standard variable rate. Speak to an IFA or mortgage broker. They have access to sourcing software which does all affordability calculations and lending criteria built in.

I found out last week it's 2 year fixed term which might hopefully make a difference?

I have had our house valued and they expect £285k and higher (same agent as neighbouring house)

Good point about SVR affordability. I'm looking at non fixed rates with no ERC so I can fix at a later date depending on how long rates stay as they are Brexit etc.