Is 200k deposit enough

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I posted a thread the other day about stamp duty.
I inherited the house we're in (gifted) it's estimated approx £204 on Zoopla, it's had an extension kitchen diner, new garden, soon to have a larger porch and new windows on the front, so we've done alot of work to it.
We earn between us about 77k, something like that.
The house we love is £550k.
Do we stand a chance ???
This is all new to me, I've never had a mortgage as this was gifted and it's mortgage free.
Thanks all

The house isn't big enough any more sadly. We have two infants who will need their own rooms eventually. It is a great area but this house is actually only down the road and it's a sought after area again, which is probably driving the house prices !

So realistically what can we afford on our numbers ?

Children can limit the amount you borrow.

I'm sorry but I wouldn't buy this house, I'd go no more than £450k if I were you

It maybe depends on other elements of your affordability - your age, if you pay for childcare, student loans, what you bills will look like in the new property.

We pay 2k a month for our mortgage and earn about 150k combined - we are comfortable but don’t have loads of spare cash. We have student loans almost paid off and a baby in nursery. We took a mortgage at about 60% of our ‘affordability’ according to the mortgage brokers/bank. I think we ‘could’ have managed going to 100% but it would mean no monthly savings, room for improvements, holidays etc.

Unless your priority is to live in a really nice house and you’re actually not fussed by the other things (maybe you’re homebodies!?) then I really wouldn’t advise maxing yourselves out.

Also yes as a pp has said Zoopla is shite at valuations. I'd get a local estate agent round to actually value it. Especially as you've done work to it. What are similar properties selling for in your area?

I don't think you can do anything until you get a proper valuation. I live in a new build and identical house types (exact same layout and garden size) vary wildly on zoopla on my development so I don't find it very accurate.

I'd choose mortgage free over borrowing again. Can you extend or convert the loft ? What would happen if one of your were ill,could the other pay the mortgage?

I think it will depend how good your MA is if they will do this with you or not, but I would have a real thorough look through your finances and work how much you can afford to pay on your mortgage monthly. Then work backwards from that. Maybe use 4.5% as a mortgage rate in your own calculations but I’d be hopeful you can get under that if you have good credit.

Saying this at a ballpark

I reckon 450k property would give you a circa £1500 mortgage.

If you’ve been able to save at least £1750 a month with your current lifestyle then it would be so-able. Accounting for higher bills on a larger property.

On paper it's fine, but if you're mortgage free what do you currently do with that extra 2k each month? Do you spend it or literally just stick in in savings.. if it's not savings then I wouldn't do it

For me the missing info here is whether you’re comfortably putting the mortgage repayment amount aside as savings currently. If you’re not then you probably don’t have the financial stability to afford the mortgage.

you mention small children - how long do you have nursery bills to pay for?

I would love to extend this place and stay but it's mid terraced so I don't think we can ! We already extended the kitchen (into the garden) and I don't think we can go up. Also the loft space you have to crawl through it so it's not big enough

We put 1500 into a joint account a month and that covers all of our bills and shopping etc
We probably could tighten our belts but because we haven't had a mortgage to pay for we have been comfortable. I'm terrible for my holidays too so i know something would have to sacrifice

Sounds as if you can’t afford any where near that. As you’re not paying any mortgage at all I think you need to spend at least 6 months ideally longer putting £2k a month into a savings account to see how you cope with having that much less. If you did get a mortgage that big other costs like heating, council and up keep will go up to. If you want to move you need to have the money saved for stamp duty, mortgage arrangement fee and removal any way.

If you can make it work it’s completely doable. The choice is yours.

But.

think about things like your age / will you be having children / costs of childcare etc.

Long term financial planning is key here. Are you in jobs where you will progress. Etc etc.

Thanks all.
We will see what the broker says this week.
I have seen a few more houses that are cheaper and still meet our requirements (4 bed is the main thing)

Will your infants not need childcare soon?

We're in a similar position with similar numbers and have decided to stretch ourselves for the long term house but we have two lots of nursery fees that disappear in 18 months and I'm on the cusp of promotion so things won't be very tight for long.
If I couldn't see any circumstances changing for the better in the fairly short term, I wouldn't want to commit to those numbers in your shoes.

its too much on your salaries. I’d be going for something around £400k max on £77k income.

Honestly I think we need a bit more detail about your outgoings and savings per month to say what we think is sensible affordability wise. But you have an appointment with your mortgage broker soon and they will go through that with you and give you an idea or your monthly payments.

Honestly £1500 on bills without a mortgage sounds high! Especially for a small terrace house, what can you cut back?

I would open up excel and do a current budget and a future budget and play around with it. I'd advise you to do this before your mortgage appt.

Remember cost of living will probably go up so will your salaries keep pace with this. How many years mortgage are you looking at. What are you prepared to give up so holidays, extracurricular activities etc. We have never taken on the max mortgage we could and honestly as prices have risen as well as bills I am glad. Really look at finances and remember to consider what would happen if one of you lost your job etc.

When we started house hunting with the intention of getting a bigger home and larger mortgage, we immediately began saving via standing order the difference between our current mortgage and new mortgage payments monthly.

So for example our previous mortgage was £500 and our new one would be about £1500, so we saved a grand a month until completion on the new house. It took a while so we had a lovely extra savings pot to help with decorating the new house and we didn’t need a huge adjustment when we moved in.

In your situation I would definitely do this, as you get used to tightening belts and it obviously boosts your savings!

That's going to be a huge lifestyle change, where will you need to cut back to free up £1900 a month? That must be a huge portion on £77k a year?

With a combined income of £77k it would be foolish to take on a mortgage with payments higher than £1000pm. Remember that rates can change and taking it on at £1000pm now could mean that yoir repayments go up to £1500 in a few years.

You can borrow between £150,000 to £200,000 and get a monthly obligation of £1000ish depending on interest rate and duration.

Look for a house that is worth £350,000 to £400,000. That is what you can afford. There will always be properties that are nicer than whatever-it-is-you-can-afford. This would be true even if the above amounts were all doubled. Cut your coat according to your cloth and don't hanker after what you might have got if you were richer.

We are in a similar situation. Current house mortgage free but we are out growing it with 2 teens and a primary aged kid. Partner works from home a lot and the kids have taken over his office. We also need another bathroom.
We have extended as much as we can. We could add on a side extension but that would take up a huge part of our drive which we use.

Ours has been valued at £325k and we are looking in the £450k that gives us a mortgage of about £1-£1.5k. (Depending on term) We are putting away £1500 a month in readiness for the mortgage. Saying all that, we can’t find a blooming house!

we could get a larger house as we earn enough but the eldest will be learning to drive next year and then off to uni, followed by the next teen so life is about to get expensive so we don’t want to over stretch.

Dh would be happy to never spend a penny and save save save, I believe our kids should have days out/holidays etc. so we can cut back definitely, but I don't want us to be skint as you've all said.
Our monthly energy bill is direct debit £195 per month. Council tax £167 which will soon go up.
Then there is food, I spend alot on that and could cut back definitely.
We have pet insurance £15 a month
Water £50 a month
House insurance £16 a month
Netflix £10.99 a month
Nappies etc