First time house purchase/mortgage
Discussion
Right so, me and the OH have just had an offer accepted on a house. But I am worrying about money and need either some reassurance or a direction to bail!
House is 208,000 (was on for 205, underpriced a little to get a very quick sale, not that would have been an issue even if they put it on at 215 like originally planned).
We have sold our property leaving us with 95k net cash.
we estimate 7-8k for total fees (solicitors, stamp, survey etc) and plan to put in around 78k as a deposit leaving a 130k for mortgage. leaving some money over (10k) for contingency and having to buy a fridge,freezer,washer
The issue here is I haven't been in my current job for 3 months and my OH currently doesn't have a job so the mortgage will be mine to bare for a while (hopefully not too long).
Because of our circustances with jobs the absolute best mortgage I got offered was 157k at 2.6%. So hopefully looking to do 130k at a similar % fixed for 3 years.
Repayments in this case would be £520 based on 30 year loan.
Now, I believe I can manage that presently. Its about 25% of my net income. All remaining bills can be covered with plenty of room to spare. Work is but 5 minutes drive so no large commuting costs and OH does have a good rainy day cash reserve as a fall back. I am confident I can manage that for a few months. When the OH gets a job (and I am expecting her to earn about 80% of what I do) we should be comfortable and we could then look at over-payments.
If we can do over-payments then I anticipate 15k-20k being paid off by 3 years with 115k left. If the rate shot up to 9.5% (i.e interest rates were back at the 6-7% level before the crash) then the monthlies on that would be nearer £1k. Anticipating that we're earning a bit more £££ by then that would be approximately 25% of total net income. (however by then we may be married and not long after that perhaps the costly money pit of a sprog).
25% of income as some sort of poor case (not a worst case because I have heard interest rates were like 16% in the early 90's!). Is that a comfortable number? ( I have no experience of this as current house was financed entirely by 0% loan from parents because at the time, not a single mortgage company would touch two research students with any kind of pole, even with 20% deposit).
Its a huge move for us and its our first time with a mortgage. I just don't want to overstretch ourselves. Mortgage advisers say its fine, but they would...they're being paid to sell them!
There was a second house in the running which would probably have been 10-15k cheaper to purchase. However, it would have needed about that spending on it to bring it up to date. The house we have offered on has already had the hard work done and wont need any work beyond painting and decorating and gardening (its even got an inspection pit in the garage! score!)
House is 208,000 (was on for 205, underpriced a little to get a very quick sale, not that would have been an issue even if they put it on at 215 like originally planned).
We have sold our property leaving us with 95k net cash.
we estimate 7-8k for total fees (solicitors, stamp, survey etc) and plan to put in around 78k as a deposit leaving a 130k for mortgage. leaving some money over (10k) for contingency and having to buy a fridge,freezer,washer
The issue here is I haven't been in my current job for 3 months and my OH currently doesn't have a job so the mortgage will be mine to bare for a while (hopefully not too long).
Because of our circustances with jobs the absolute best mortgage I got offered was 157k at 2.6%. So hopefully looking to do 130k at a similar % fixed for 3 years.
Repayments in this case would be £520 based on 30 year loan.
Now, I believe I can manage that presently. Its about 25% of my net income. All remaining bills can be covered with plenty of room to spare. Work is but 5 minutes drive so no large commuting costs and OH does have a good rainy day cash reserve as a fall back. I am confident I can manage that for a few months. When the OH gets a job (and I am expecting her to earn about 80% of what I do) we should be comfortable and we could then look at over-payments.
If we can do over-payments then I anticipate 15k-20k being paid off by 3 years with 115k left. If the rate shot up to 9.5% (i.e interest rates were back at the 6-7% level before the crash) then the monthlies on that would be nearer £1k. Anticipating that we're earning a bit more £££ by then that would be approximately 25% of total net income. (however by then we may be married and not long after that perhaps the costly money pit of a sprog).
25% of income as some sort of poor case (not a worst case because I have heard interest rates were like 16% in the early 90's!). Is that a comfortable number? ( I have no experience of this as current house was financed entirely by 0% loan from parents because at the time, not a single mortgage company would touch two research students with any kind of pole, even with 20% deposit).
Its a huge move for us and its our first time with a mortgage. I just don't want to overstretch ourselves. Mortgage advisers say its fine, but they would...they're being paid to sell them!
There was a second house in the running which would probably have been 10-15k cheaper to purchase. However, it would have needed about that spending on it to bring it up to date. The house we have offered on has already had the hard work done and wont need any work beyond painting and decorating and gardening (its even got an inspection pit in the garage! score!)
Stamp duty is 1% so £2100ish and Solictors shouldn't be more than £1200... That leaves another £4kish if you get a mortgage with no fees.
If you worried about your circumstances reduce the deposit by the maximum amount to keep the interest rate you have and have more "contingency" money I.e £20k would be three years mortgage payments and if your better off overpay.
I would say your situation is far, far better than most peoples and is very affordable relatively speaking
If you worried about your circumstances reduce the deposit by the maximum amount to keep the interest rate you have and have more "contingency" money I.e £20k would be three years mortgage payments and if your better off overpay.
I would say your situation is far, far better than most peoples and is very affordable relatively speaking
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