House affordability

[BlackST]

A person I know is looking to buy a starter house, not in the best area, for £60k.
They have £5k for a deposit.
Wages are £26k and roughly £17k however they have a 18month old child, £200 a month car lease and he is looking to buy a car on finance in the region of £15k.
Loans of about £6k and cc balance of about £2k.

Does anyone think they would be approved of the house mortgage if they tried to get the £15k car then go and apply for the house?

No it is not me my Mondeo STTDCi is perfect for the mileage I do atm.

[bogie]

Get the house first then a cheap car. On those wages a £15K car on the knock is not really the most sensible thing to do. You can get a perfectly good used family car for under £5k

[mike9009]

Seems like a crazy thing to do prior to buying a house, but I have heard worse.

They obviously have one nearly new car (lease payments) so why have another 'expensive' car and live in a stty area? Why not put the extra money from the £15k car loan towards a nicer home? Plus they may want to spend some money on the new home?

What happens if another kid comes along?

[Sarnie]

BlackST said:

A person I know is looking to buy a starter house, not in the best area, for £60k.
They have £5k for a deposit.
Wages are £26k and roughly £17k however they have a 18month old child, £200 a month car lease and he is looking to buy a car on finance in the region of £15k.
Loans of about £6k and cc balance of about £2k.

Does anyone think they would be approved of the house mortgage if they tried to get the £15k car then go and apply for the house?

No it is not me my Mondeo STTDCi is perfect for the mileage I do atm.

Would they be accepted? yes.

Does it sound like a great plan? no to me really.

[mikees]

I'm going to be the miserable old man here, but ( sorry sarnie for the swearing ) oh my titty fking Christ, are they mad the stupid, "sense of entitlement", "because we're worth it" fk wits?

I despair of the youth of today.

Buy a sink estate stt hole and have 2 expensive leased cars? Audi ? White? OP can you slap their stupid faces pls?

Shouldn't new lending regs stop this fkwittery?

[Welshbeef]

BlackST said:

A person I know is looking to buy a starter house, not in the best area, for £60k.
They have £5k for a deposit.
Wages are £26k and roughly £17k however they have a 18month old child, £200 a month car lease and he is looking to buy a car on finance in the region of £15k.
Loans of about £6k and cc balance of about £2k.

Does anyone think they would be approved of the house mortgage if they tried to get the £15k car then go and apply for the house?

No it is not me my Mondeo STTDCi is perfect for the mileage I do atm.

It's a tiny multiple on first reading but they have debts and are looking to extend borrowing before a mortgage.

IF they really do want another £15k car do that AFTER the house is owned by them not before.

Why on relatively low salaries do they want such new and pricy metal? The first new car is committed now - though what's it worth? How much debt outstanding? Could they buy a £2k car outright and clear he credit card in a year then be able to bank the car loan and credit card repayments PCM into clearing mortgage. The new other car- do they currently have a car which is owned outright in addition to the car in suggesting to downgrade from? If yes run it into the ground maximise it cheap motoring


Depending how hey play it a £55k 25year mortgage could be cleared in 7 years if hey wanted to (or even less) without that much sacrifice then be debt free for life if they choose. That's compelling a "fk you money" position in a short time frame.

[85Carrera]

mikees said:

I'm going to be the miserable old man here, but ( sorry sarnie for the swearing ) oh my titty fking Christ, are they mad the stupid, "sense of entitlement", "because we're worth it" fk wits?

I despair of the youth of today.

Buy a sink estate stt hole and have 2 expensive leased cars? Audi ? White? OP can you slap their stupid faces pls?

Shouldn't new lending regs stop this fkwittery?

Quite right. I'm sick of hearing how the entitled fking millennialls can't get on the housing ladder. Don't buy overpriced st cars on credit, dont buy 2-3 coffees a day, don't go on holiday, save some money and you can buy a house.

That's what I'd did (eg going to the market at closing time to get cheap veg, forsaking holidays, not going out 4-5 times a week) and this is also what my parents did. And my siblings and my mates. It wasn't easy but we didn't bh and whine, we got on with it and made the best of it.

It's never been easy to buy a house. The difference is that in the past it was understood that you had to make sacrifices whereas nowadays youngsters have been sucked into buying very expensive average/forgettable cars because the monthly repayment are "low" (but guess what, it all adds up), expect 3-4 exotic holidays a year and wonder why they can't afford a property.

The idea that it was ever easy it insulting and immature.

Grow up, get a life (literally) and stop fking whinging is my message to the entitled tts who think they can have the same holidays, lifestyle, etc as those of us who have worked for 25 years and buy a property. Wake up, losers, we couldn't do that, so why do you expect to?

[BlackST]

Welshbeef said:

It's a tiny multiple on first reading but they have debts and are looking to extend borrowing before a mortgage.

IF they really do want another £15k car do that AFTER the house is owned by them not before.

Why on relatively low salaries do they want such new and pricy metal? The first new car is committed now - though what's it worth? How much debt outstanding? Could they buy a £2k car outright and clear he credit card in a year then be able to bank the car loan and credit card repayments PCM into clearing mortgage. The new other car- do they currently have a car which is owned outright in addition to the car in suggesting to downgrade from? If yes run it into the ground maximise it cheap motoring


Depending how hey play it a £55k 25year mortgage could be cleared in 7 years if hey wanted to (or even less) without that much sacrifice then be debt free for life if they choose. That's compelling a "fk you money" position in a short time frame.

It is something that I definitely would not do. Buying an expensive car and getting a house but also within a few months of eachother.
I'm younger than them so all of us youths aren't the same

They only have one car between them at the moment but the situation has changed so another is needed. If it was me i'd buy a cheap runabout to get to work in and have the wife in the leased car as that is who their baby is with the majority of the time.

I'd want the loan and cc's cleared too before even thinking about a mortgage and another car. Wouldn't like the thought of losing a job and being tied to £23k of debt and also a mortgage, especially with no savings.

[rufusgti]

Reading the opening post I see
Starter home.
Baby.
Bad area.

My advice would be to re think the plan entirely. These modern starter homes are usually pretty pokey anyway, fine for a working couple but add kids and ours was just too small.

Buying in a bad area isn't the best idea, property prices seem to rise much slower. You don't think this matters until it's time to trade up, then you realise opportunities are moving away from you rather than nearer.

Add these together and you can see that in 5 years they won't be in a great situation. This is when you have to start sending your kids to schools in the bad area etc etc. I'm speaking from experience here. I couldn't afford a house in a nicer area but luckily the family you describe can. They do however need to completely overhaul their expectations regarding monthly spending and cars. But if they do it will make a huge difference to themselves and their new family.

Good luck to them.

[Welshbeef]

Also what is the true cost of child care? When we worked it out you'd need to be earning £28k to breakdown so if she is going to work for £17k full time then it's possible that she is actually losing out and they would be financially better off if she quit work.


Child care is hugely expensive

[BlackST]

The houses that are available are ex council so would need a few £k spent on them however the parents of the couple can do pretty much anything DIY.
If the houses were in the next street then they would be maybe £80-90k, however the street is filled with council tenants so it seems the values have taken a hit.
Child care isn't really a big worry as the baby's grandparents and great grandparents live in the surrounding streets and already have him atleast 50% of the time. A huge factor in choosing the cheap house and the location.
Perfect for childcare for them.

[Welshbeef]

BlackST said:

The houses that are available are ex council so would need a few £k spent on them however the parents of the couple can do pretty much anything DIY.
If the houses were in the next street then they would be maybe £80-90k, however the street is filled with council tenants so it seems the values have taken a hit.
Child care isn't really a big worry as the baby's grandparents and great grandparents live in the surrounding streets and already have him atleast 50% of the time. A huge factor in choosing the cheap house and the location.
Perfect for childcare for them.

But they are reliant on Grand parents who may sooner than thought become too old to look after kids likewise the parents you simply don't know what will or will not happen. Fact is currently they are reliant on this free service what if that vanishes overnight what then? Likely will not but they must have a plan and when that does happen it would mean a loss of £17k salary instantly or net to nothing after child care comes into play.

To simply choose an area due to currently free childcare is pretty short sighted IMHO

[BlackST]

Welshbeef said:

But they are reliant on Grand parents who may sooner than thought become too old to look after kids likewise the parents you simply don't know what will or will not happen. Fact is currently they are reliant on this free service what if that vanishes overnight what then? Likely will not but they must have a plan and when that does happen it would mean a loss of £17k salary instantly or net to nothing after child care comes into play.

To simply choose an area due to currently free childcare is pretty short sighted IMHO

Without a doubt. I think they just want out of the parents house, see the house as a fix which gives them close proximity to their parents and grandparents so help for the child immediately and also a house which will probably be cheaper in mortgage payments than a different house paying a landlords rent.

[Rangeroverover]

Welshbeef said:

Also what is the true cost of child care? When we worked it out you'd need to be earning £28k to breakdown so if she is going to work for £17k full time then it's possible that she is actually losing out and they would be financially better off if she quit work.


Child care is hugely expensive

As I have just discovered £800-900 per month.....thats nearly 50% that skool fees would be

[XMT]

I totally agree with some of the posts on here, the generally stupidity of some people is beyond me.
People Moan all the time about not having enough money for a house yet their standard of living is of what someone on 100k+ salary would have.

My friend who now earns 45k a year and before that was contracting for 2 years at a bloody good day rate has not a penny to show for 10 years of hard work. Has a new mercedes, wears expensive suits, buys fking 1k watches and eats and drinks only the best. Recently found out him and his mrs have booked a holiday costing in excess of 3k because she was stressed from washing the fking dishes.

Then complains to me about not having enough money for a deposit for a house, I was just short of swearing at his full family considering he has racked in over 150k in 3 years after tax and has jack st to show for it.

On the other side for the last 4 years I have literally bought the same crap clothes from primark, bought some stuff in sales, kept the same car bought outright 2 years ago and mrs drives a 3k focus. Not been on holiday in 4 years - result: I have a 120k deposit.

People need to get a grip, I am only 30 but the majority of my generation in general wants a job they love, lots of money from it, high standard of living but pay F all in tax. They just think everything is a God given right, no its not, get lost and work for it and save up.

Edited by XMT on Wednesday 27th July 11:27

[MrBarry123]

XMT said:

I totally agree with some of the posts on here, the generally stupidity of some people is beyond me.
People Moan all the time about not having enough money for a house yet their standard of living is of what someone on 100k+ salary would have.

My friend who now earns 45k a year and before that was contracting for 2 years at a bloody good day rate has not a penny to show for 10 years of hard work. Has a new mercedes, wears expensive suits, buys fking 1k watches and eats and drinks only the best. Recently found out him and his mrs have booked a holiday costing in excess of 3k because she was stressed from washing the fking dishes.

Then complains to me about not having enough money for a deposit for a house, I was just short of swearing at his full family considering he has racked in over 150k in 3 years after tax and has jack st to show for it.

On the other side for the last 4 years I have literally bought the same crap clothes from primark, bought some stuff in sales, kept the same car bought outright 2 years ago and mrs drives a 3k focus. Not been on holiday in 4 years - result: I have a 120k deposit.

People need to get a grip, I am only 30 but the majority of my generation in general wants a job they love, lots of money from it, high standard of living but pay F all in tax. They just think everything is a God given right, no its not, get lost and work for it and save up.

Edited by XMT on Wednesday 27th July 11:27

But I bet your mate is less grumpy than you?

[CountZero23]

25 year mortgage on 55k comes out as around £220, so 'should' be affordable.

That said if they have wracked up 8k of debt while living with a parent what makes them think they can handle an additional £400 a month on another finance deal + mortgage payments while paying to furnish and decorate a house?

Batst crazy priorties; they will be paying twice as much on car finance deals as they will on the mortgage.

[MOBB]

Nicer house, lesser car would be my choice.

Odd choice to pay more a month on your car than on your house?

[Welshbeef]

Rangeroverover said:

Welshbeef said:

Also what is the true cost of child care? When we worked it out you'd need to be earning £28k to breakdown so if she is going to work for £17k full time then it's possible that she is actually losing out and they would be financially better off if she quit work.


Child care is hugely expensive

As I have just discovered £800-900 per month.....thats nearly 50% that skool fees would be

So yes take £17k less tax and NI then this individual is working 160hrs a month plus commuting for what £300pcm if that.

[okgo]

Welshbeef said:

But they are reliant on Grand parents who may sooner than thought become too old to look after kids likewise the parents you simply don't know what will or will not happen. Fact is currently they are reliant on this free service what if that vanishes overnight what then? Likely will not but they must have a plan and when that does happen it would mean a loss of £17k salary instantly or net to nothing after child care comes into play.

To simply choose an area due to currently free childcare is pretty short sighted IMHO

The fact the great grand parents are still alive and able to look after kids tells you all you need to know, they sound like proper teen preggo types, so I'm sure they'll be around for a while yet.