House affordability
Discussion
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.
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.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 "f
k 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.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 "f
k you money" position in a short time frame. 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.
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.
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 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.To simply choose an area due to currently free childcare is pretty short sighted IMHO
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