What house price can we afford?

[RedRobyn2021]

We already own a house that we bought 6 years ago for £175K

We have £137K left on the mortgage

It was valued by an estate agent last year at £250K top heavy

We are now a one working household as I stay at home with DD but will eventually go back to working, income is £38K

We do have some savings of £30K too

The problem is our house is in a lovely area but it's getting too small for us, just trying to figure out if it's even feasible that we could get something bigger

Can anyone help? I know I could speak to a broker but I don't want to if it's completely pointless

Rough calculation based on three times your salary 280. Mortgage 160ish plus your equity

What’s your monthly payments? What could you go to comfortable each month? (Remember that council tax and grading will also increase).

www.moneysavingexpert.com/mortgages/how-much-mortgage-borrowing/

Type in your equity and income and this should give an idea.

Sounds like you've about £100k equity. Then it's typically 4.5 times to 5 times your income that you can borrow. So about £152k to about £170k.

So with your extra savings, sounds like you could buy a £300k house?

You may be better extending if its a via le option.

i did a mortgage calculation yesterday (pure curiosity) and they would lend us an amount that would cost £2500 per month. I was shocked - absolutely no way can we afford that. Currently pay £1088 and could do an extra £500 but more would put us in a really vulnerable position.

So you have about 100k equity and 30k savings and currently 38k income for a 250k home. I would say you can pretty much afford what you’ve already got. Did they lend you your current mortgage based on 38k income?
can’t see you being lent much more than your current outstanding mortgage until you get a 2nd income.

I wish we could, but there's just no way. We can't even go up. It's such a shame.

£700pm I don't think we'd want to pay much more than that either tbh

That's the thing isn't it, you don't want to stretch yourself to much incase things don't go to plan.

No I was working full time and like a lot of women, I've ended up being the one to stay home with my daughter

Thank you

We moved last year. Had £60k equity in our home but only used £48k for deposit towards a house bought for £277k, over 35 years we pay £1056 a month, fixed 5 years at somewhere between 4-5%. We were in a 2 bed terraced moved to 4 bed semi, as we also had our second DC last year, so needed the space. Although we had 2 incomes £44k and my part time salary £16.5k

How long is your current mortgage term? We upsized and had to increase our mortgage by quite a lot. We decided to lengthen our mortgage term from 26 years to 34 years (the max we could). It made a huge difference to monthly payments. Obviously it also makes a huge difference to interest paid over the length of the mortgage but we plan to shorten it later when our salaries increase and we're not spending a fortune decorating.

Get Kirsty & Phil round 😊

only joking

I'd get another valuation as prices have dropped in many places since last year, then speak to your mortgage provider about the possibility of porting your mortgage and borrowing more. This should give you more information. What are the prices of the kind of house you're looking at? If you think you could manage on your current household income things can only get easier when you start earning. Will you keep the 30k as a buffer?