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Original poster

come and tell me its do-able!!!!

37 replies

Becaroooo · 02/09/2011 13:31

Our monthly incomin is £2500-2600

We have no debts.

Tell me that a £850 pm mortgage is do-able!!!

OP posts:
LaurieFairyCake · 02/09/2011 13:33

depends if you need to run a car as they are a massive expense

is that repayment? fixed rate? if not fixed rate can you handle it going up if interest rates rise?

Original poster
Becaroooo · 02/09/2011 13:43

Its a 2 yr FR repayment mortgage.

I have a car bit dont use it that much...school run etc

OP posts:
Original poster
Becaroooo · 02/09/2011 13:43

"incomin"
????
That should read "income" Blush

OP posts:
Fizzylemonade · 02/09/2011 13:56

Depends how much your outgoings are.

Some people live far more frugally than others. We moved to a bigger house so halved our disposable income, but I had to take into consideration that I now have to drive to school so petrol costs are much higher.

Plus our insurance is higher as much bigger house as is the council tax.

tyler80 · 02/09/2011 14:14

It's a third of your income (presuming take home?) so just about ok. More of a worry is could you afford it if interest rates are higher at the end of the fixed term?

Original poster
Becaroooo · 02/09/2011 15:06

Yes, that is a worry but have no idea how to work out what the repayments would be if Interest rates went to say 10%?

OP posts:
mylovelymonster · 02/09/2011 18:20

draw up a spreadsheet (scrap piece of paper, pencil & calculator) with all incomings and outgoings - all household payments. Check against bank statements. Be really thorough - factor in need for some savings for birthdays/holidays/Christmas and unforseen events. Then you will be able to clearly see if it's doable.
here for a way of adjusting interest rate to see how much repayments may fluctuate - up is the only way from here, let's face it.

Don't do it if it looks tight. Prices are on their way down, remember, and you have a nice rental to keep you warm during the winter Smile

mylovelymonster · 02/09/2011 18:22

Also - look at EPC for the house you're interested in to get an idea of heating/utilities costs and also factor in any increase in Council Tax to add to your projected outgoings if you move.

Justfeckinggoogleit · 02/09/2011 18:25

Personally, I wouldn't do it.

AlpinePony · 02/09/2011 18:26

In a nutshell you'd be fucked if interest rates went to 10%.

Can you fix for longer with a view of hopefully increased earnings at the end of that term?

Justfeckinggoogleit · 02/09/2011 18:28

What about interest only?

AlpinePony · 02/09/2011 18:31

Interest only is MUCH worse wrt interest rate rises!

Justfeckinggoogleit · 02/09/2011 18:31

True, but you do pay less monthly.

mylovelymonster · 02/09/2011 18:38

Becarooooooooo - why not look at it the other way round? Work out a comfortable mortgage with room for manoevre when IRs rise (I think 8% is an historic average to work to), then base an offer on the amount you can comfortably afford? - rather than basing mortgage on asking price (assuming here).
Worth a go. They can only say no.

Interest only? Oh yes - easy option! Can you also recommend a suitable investment vehicle to pay off capital at the end of the term? Would have to be a bloody lucrative one in the current climate & be cheaper than repayment mortgage.......

Justfeckinggoogleit · 02/09/2011 18:46

Interest only actually works very well indeed for some people. Those with large amounts of equity or who get paid bonuses or have investments.

Original poster
Becaroooo · 02/09/2011 19:43

Wouldnt be comfortable taking out an interest only mortage...I know its cheaper in the short term, but you can be left in the lurch and as JFGI says, its better for some than others.

MLM We are happy here but am now stressing that it will be much harder to get a mortgage when we do find a house we like Sad Mortgage lending is already at an all time low and I cant see it getting any better...

Its too much money. I know that, really. Just needed you all to tell me too! Smile

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mylovelymonster · 02/09/2011 21:34

Why would you not be able to get a mortgage? Assuming you have a chunk of equity from your sale and don't need a very high LTV, have permanent job(s) with manageable outgoings to service the repayments, then there is lending available. I don't see why it would change. The banks are re-capitalising and being very careful about to whom and what they lend, which is no bad thing.

Don't stress! Enjoy your family and your new village.

Original poster
Becaroooo · 03/09/2011 08:25

We dont have a massive chunk sadly Sad

We have £20k for a deposit (which we hope to add to) and extra for fees and stamp duty. So we would need 85% LTV I reckon.

Just worried that the banks may stop offering higer LTV loans (although I have seen a 95% one recently!)

Perhaps I am worrying about nothing...I hope so!

OP posts:
peggyblackett · 03/09/2011 08:28

Is your income likely to rise in the future? I.e. promotions at work?

Original poster
Becaroooo · 03/09/2011 08:38

No I dont think so...I am hoping to retrain (not sure as what yet!!) and dh's salary wont get any larger.

OP posts:
AlpinePony · 03/09/2011 08:43

If you retrain how are you going to pay the mortgage?

Original poster
Becaroooo · 03/09/2011 08:47

I am a SAHM atm so mortgage is based n dh's salary alone alpine (sorry should have made that clear)

OP posts:
Justfeckinggoogleit · 03/09/2011 08:50

I'd make absolutely sure you can secure a mortgage first and get it in writing. Most banks are far happier with a 25% deposit.

MrsSnoops · 03/09/2011 08:52

That's what our monthly income is and our mortgage is a touch more than that. Do a spreadsheet. There is not a lot of money left at the end of the month.

AlpinePony · 03/09/2011 08:53

How much will retraining cost you? Will the children be in school then or will you need to pay nursery fees? Will you study at home or need to pay travel?

What is the rate of the mortgage you are currently looking at? If you fix for 2 years and there's a 2 point base rate increase in that time and/or prices fall negating your equity - how are you for a 1450 a month repayment?

How much is council tax? I see a lot of people paying 200 a month. Water bills? Gas? electric? Insurance? Maintenance? Even buying a fecking ladder to do the guttering all seems to add up! :(