New house purchase, am I being an idiot??
Discussion
Looking at buying a new house with my new partner.
I earn about £40k
She earns about £12k
We will have a six and a twelve year old.
We have £126,000 in equity.
We are looking at buying a new house at £382,000 and securing a five year fixed mortgage at 1.58 meaning payments will be £917 per month for 29 years.
I am 40 she is 41 And whilst a bit gruesome both Of us have parents in 70s who have a fair bit in the bank (think just north of a million combined).
After all outgoings including food and petrol we will have about £1200 per month to spend on ourselves/ save and was thinking of £300 each and £600 savings per month.
These figures Do not include include bonuses or overtime which generally amount about £4500 per year.
Does this sound crazy or doable??
I earn about £40k
She earns about £12k
We will have a six and a twelve year old.
We have £126,000 in equity.
We are looking at buying a new house at £382,000 and securing a five year fixed mortgage at 1.58 meaning payments will be £917 per month for 29 years.
I am 40 she is 41 And whilst a bit gruesome both Of us have parents in 70s who have a fair bit in the bank (think just north of a million combined).
After all outgoings including food and petrol we will have about £1200 per month to spend on ourselves/ save and was thinking of £300 each and £600 savings per month.
These figures Do not include include bonuses or overtime which generally amount about £4500 per year.
Does this sound crazy or doable??
Sorry the bit about the parents isn’t to show i need them for the mortgage but to show I don’t need to go crazy with savings and as long as the savings keep going up at least a bit year on year we will be fine for retirement.
One sibling for each of us.
No worries about care homes as this is already taken care of.
I work in electrical infrastructure and have never been so busy or in demand.
I have raised the interest rate up to 5% and it still leaves some in the bank but would limit us for holidays somewhat, again this is without the overtime as I don’t think it wise to rely on this despite 17 years and no months without.
One sibling for each of us.
No worries about care homes as this is already taken care of.
I work in electrical infrastructure and have never been so busy or in demand.
I have raised the interest rate up to 5% and it still leaves some in the bank but would limit us for holidays somewhat, again this is without the overtime as I don’t think it wise to rely on this despite 17 years and no months without.
Seventyseven7 said:
How much is your current mortgage?
3k a month with a 1k mortgage and 2 children is going to be tough in my opinion but I’m sure you could make it work
Current mortgage is £614 just for me this would be our first house together. 3k a month with a 1k mortgage and 2 children is going to be tough in my opinion but I’m sure you could make it work
Total combined monthly income would be around £3600 take home after tax, ni and pensions.
Job is as secure as a job can be really.
Always busy hence the constant need for overtime (at least an hour a day).
Without parents we will be accruing savings even at 5% rates. But it is something that makes me feel more comfortable with things.
To be clear though I have told them I would prefer for them to spend their money but they have little want to and are set up to pass it onto me and my sibling as that is what they have worked hard for. Again their words and wishes not us asking for this.
Always busy hence the constant need for overtime (at least an hour a day).
Without parents we will be accruing savings even at 5% rates. But it is something that makes me feel more comfortable with things.
To be clear though I have told them I would prefer for them to spend their money but they have little want to and are set up to pass it onto me and my sibling as that is what they have worked hard for. Again their words and wishes not us asking for this.
Seventyseven7 said:
I wouldn’t do it personally, just due to the lack of money to enjoy life you’ll have. Having a bigger house comes with more costs, not just insurance and power etc, but having to furniture it, maintain it etc. One month you’ll need £500 for some garden furniture you didn’t have, or £300 on some boiler repair etc and you’ll realise you have no money to go out with the kids and wife that month.
It’s doable it just depends what lifestyle you want.
I’d tell the wife to get a better job
Will be a brand new house so fingers crossed not too many unseen expenses for a while and we have furniture to spare!It’s doable it just depends what lifestyle you want.
I’d tell the wife to get a better job
I have lived the lavish lifestyle while with my ex wife with houses in different countries, expensive trinkets and going out all the time. Me and my new partner now just want to curl up with the kids and watch a film or go for a walk.
Sarnie said:
Your income is unlikely to be enough............
Do you mean to get the mortgage?I have qualified for £255,000 if no overtime allowed for and £278,200 if it is allowed for.
Both of these figures allow me to purchase the property and I have about £8,000 in the bank at the moment.
If you mean to live from this is my concern.
She id used to living very simply, I am coming round to it but am with people on here, £6000 savings a year (minus a holiday should we want one, plus the potential of £4500 overtime) doesn’t sound a huge amount to me. But like I have said before I get that I have been very privileged before and that this is the first time I have had to think about money.
Partners job seems safe, she is a key worker and they have not had a downturn in work but she has only been there a year.
I currently have £57 per month going on a 0%interest loan on a bike which finishes in July 2021 and will be saving a further £50 per month through having no need for a phone from this November so that frees up another £100.
I will also be getting a payrise next april which will be approx £90 per month which has already been agreed with the unions.
I also have a sofa on 0% at £55 per month for four years (these have both been taken i to account by the mortgage broker while qualifying us).
I currently have £57 per month going on a 0%interest loan on a bike which finishes in July 2021 and will be saving a further £50 per month through having no need for a phone from this November so that frees up another £100.
I will also be getting a payrise next april which will be approx £90 per month which has already been agreed with the unions.
I also have a sofa on 0% at £55 per month for four years (these have both been taken i to account by the mortgage broker while qualifying us).
Unsure of the lender to be honest but I have had 2 brokers qualify me as looking at 2 different houses.
First one was meridan mortgages (suggested by Bellway homes) which was about two weeks ago who said £272,800 max
Second one was today called Evolve (suggested by Harron Homes) who said £255,000 or £272,000 if could prove 3 months of overtime above £300.
I qualified by giving my address, work address, outgoing and pay. Apologies if you mean something else.
First one was meridan mortgages (suggested by Bellway homes) which was about two weeks ago who said £272,800 max
Second one was today called Evolve (suggested by Harron Homes) who said £255,000 or £272,000 if could prove 3 months of overtime above £300.
I qualified by giving my address, work address, outgoing and pay. Apologies if you mean something else.
Diplomatico said:
What’s in your outgoings including food and petrol? Meals out each week? Clothes/toys for the kids? Or just the essentials?
Outgoings are Mortgage
Mobile
Apple music
Sky
House ins
Car
C tax
Utilities
Car insurance
Car ins elle
Car tax
Tv license
Bike
Food
Petrol
Lenses
sofa
Meals out will come out of the £300 we will be giving ourselves per month as will clothing etc.
Diplomatico said:
I guess the risk is something happens before you have sufficiently built your reserves back up.
But then if you are in the house you want what are you saving for? You don’t need to save for the next house.
What we would be saving for is the what ifs, and to replace the cars as and when required as don’t want car finance and currently own both outright. But then if you are in the house you want what are you saving for? You don’t need to save for the next house.
My plan is save all the money we have extra so £7200 per year and use the overtime for holidays, so no overtime no holidays but holidays are 3 weeks of a year vs the other 49 weeks in a lovely home.
The Moose said:
To make sure I have this clear, without overtime you guys earn a little over £3,500 after tax?
Your proposed mortgage payment is £917?
I'd say that was a little high. Can you pick up some other income to help (over and above the overtime)? Or can she earn some more?
The above is correct, household income of £3500 plus overtime, after all outgoings including food and petrol we will have £2155 left. Minus the mortgage of £917 = £1238 left over. Minus £300 each equals £638 per month savings.Your proposed mortgage payment is £917?
I'd say that was a little high. Can you pick up some other income to help (over and above the overtime)? Or can she earn some more?
Edited by The Moose on Tuesday 4th August 23:22
In a years time there will be no bike to pay for (£57 per month), mobile phone will be reduced to sim only (saving £50 per month) and a payrise (£90 per month)
So an extra £197 per month into savings minus cost of living increase in a years time.
For now, no opportunity for her to earn more.
Sarnie said:
You said your income was "about £40k".................is that including your overtime or not?
If so, how much is your basic pay and how much is overtime?
Basic pay is £39,520. If so, how much is your basic pay and how much is overtime?
I then generally get about £4500 of overtime on top of this.
However, i have seen others in different jobs make the mistake of using overtime to live off of and I do not want to fall into this trap. I am happy to use the overtime to pay for things such as holidays but i don't want to rely on it for day to day living.
The other option is a cheaper house which is same size, still new, but in a different location and next to a main road.
This would leave £8900 savings per year without overtime, again a likely £4500 on top of this.
This is the one I think makes most sense as a good trade off between size (1500 sq ft) and cost with the down side being the main road, hawthorn hedge between is and it so kids will be okay.
Does this sound a good figure? Obviously it is better but is it a good amount of savings?
This would leave £8900 savings per year without overtime, again a likely £4500 on top of this.
This is the one I think makes most sense as a good trade off between size (1500 sq ft) and cost with the down side being the main road, hawthorn hedge between is and it so kids will be okay.
Does this sound a good figure? Obviously it is better but is it a good amount of savings?
It will be fixed for 5 years at 1.58% part of the reason for the high mortgage is i need to pay £8k to get out of a 10 year fixed mortgage so this eats into my savings/equity but overall saves me over the next 5 years.
The house should (should!) go up in value as it’s in a really good location just outside of a major town with a canal passing through and a very popular house style with detached double garage. I initially was looking at one at £340,000 slightly smaller and single detached garage but on the edge of a rubbish area and I would be concerned about the value of that one dropping.
The house should (should!) go up in value as it’s in a really good location just outside of a major town with a canal passing through and a very popular house style with detached double garage. I initially was looking at one at £340,000 slightly smaller and single detached garage but on the edge of a rubbish area and I would be concerned about the value of that one dropping.
For the care home question i am unsure but my dad’s mums money went i to a care home instead of my parents and my parents have stated they have taken advice on what to do to ensure this doesn’t happen. May dad especially is very careful with money, to give an indication of what i mean he has a million plus worth of investments but was “only” on about £60k per year with two kids and a stay at home wife, so if there is a way he will of exploited it.
I get what you’re saying about the stretch, i have been living off of £300 per month now for a bit as my divorce took all my money but left me with the mortgage and a car payment. The car payment was £450 which i have now sorted and own a different car outright.
But then i was wasteful before and I want a simpler homely life now.
I get what you’re saying about the stretch, i have been living off of £300 per month now for a bit as my divorce took all my money but left me with the mortgage and a car payment. The car payment was £450 which i have now sorted and own a different car outright.
But then i was wasteful before and I want a simpler homely life now.
markiii said:
appreciating my view is somewhat cynical but......
is be more concerned about a partner earning 12k who has 2 kids
your taking on a lot of risk there
if it goes pearshaped expect to be paying for that house for them to live in
All covered Legally to protect me. Trust me I aint having it happen again!is be more concerned about a partner earning 12k who has 2 kids
your taking on a lot of risk there
if it goes pearshaped expect to be paying for that house for them to live in
Fusion777 said:
Wouldn't assume this either. Prices are at an all time high. It's always conventional wisdom that prices will rise forever, but this isn't guaranteed. Last time around prices dropped around 16% on average, and this recession looks like it may be even larger than the financial crash.
I would be tempted to wait for a period of time to see which directions things head in. If prices start sliding, it will benefit you to wait if trading up. You can't time the bottom of the market, but you can make sure you don't jump in when it's at the top.
Sorry i get your point, i meant as a risk the expensive one seems less of a risk than the cheap one due to location. I would be tempted to wait for a period of time to see which directions things head in. If prices start sliding, it will benefit you to wait if trading up. You can't time the bottom of the market, but you can make sure you don't jump in when it's at the top.
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