Mortgage maths help please
Discussion
There’s a house that’s been for sale near me for months, since August I think, and has only been reduced once in that time (£285k down to £280k, it ain’t worth that!).
I few months ago I went for an appointment with my mortgage advisor (Natwest, if it matters) and the figures we scribbled suggested I’m around £30k short of the asking price (which I’m not willing to pay, who does with houses!) without trying to work too hard and be in a potentially rough situation if the market collapses.
Now, that should be that, but this house is like a rash I can’t ignore! So, I appeal to the PH finance wizards to help me figure out if I can (unofficially) afford this place...
Very basic sums, I’m 27, I gross ~£50k which is guaranteed to go up by roughly 5% in the next year (unprovable until contract is reissued, but it’s a service increment of 2.5% plus union agreed pay rise of the same, you know the type).
The house I’m in now has a mortgage of ~£120k and just under 25 years remaining, and is worth somewhere between 165-175 depending on the demand - which of course isn’t the best at the mo.
I have a disposable income each month of around £800 after everything (not counting saving, which of course I should be doing more of) - so in theory I SHOULD be able to breeze it, but my borrowing repayments are quite high, a loan for a wedding I never ended up having (well done, me!) and a couple of 0% deals which all run for between 1-2 more years.
Half of me thinks I should concentrate on increasing my disposable and my ‘mortgageability’ will naturally increase, but this house is somewhat a dream property... is it worth pursuing or let this fish go and bide my time?
Sorry for the essay, I’ve been racking my brain on this for weeks! Any useful info or experience is appreciated, thanks all!
TL:DR, with mortgage of 120k and equity of up to 50k, I need to borrow another 90k ish (again, I’m not paying the asking price, why do you think it hasn’t sold!) is £50k per year enough with a bit too much debt?
I few months ago I went for an appointment with my mortgage advisor (Natwest, if it matters) and the figures we scribbled suggested I’m around £30k short of the asking price (which I’m not willing to pay, who does with houses!) without trying to work too hard and be in a potentially rough situation if the market collapses.
Now, that should be that, but this house is like a rash I can’t ignore! So, I appeal to the PH finance wizards to help me figure out if I can (unofficially) afford this place...
Very basic sums, I’m 27, I gross ~£50k which is guaranteed to go up by roughly 5% in the next year (unprovable until contract is reissued, but it’s a service increment of 2.5% plus union agreed pay rise of the same, you know the type).
The house I’m in now has a mortgage of ~£120k and just under 25 years remaining, and is worth somewhere between 165-175 depending on the demand - which of course isn’t the best at the mo.
I have a disposable income each month of around £800 after everything (not counting saving, which of course I should be doing more of) - so in theory I SHOULD be able to breeze it, but my borrowing repayments are quite high, a loan for a wedding I never ended up having (well done, me!) and a couple of 0% deals which all run for between 1-2 more years.
Half of me thinks I should concentrate on increasing my disposable and my ‘mortgageability’ will naturally increase, but this house is somewhat a dream property... is it worth pursuing or let this fish go and bide my time?
Sorry for the essay, I’ve been racking my brain on this for weeks! Any useful info or experience is appreciated, thanks all!
TL:DR, with mortgage of 120k and equity of up to 50k, I need to borrow another 90k ish (again, I’m not paying the asking price, why do you think it hasn’t sold!) is £50k per year enough with a bit too much debt?
OGR4M said:
There’s a house that’s been for sale near me for months, since August I think, and has only been reduced once in that time (£285k down to £280k, it ain’t worth that!).
I few months ago I went for an appointment with my mortgage advisor (Natwest, if it matters) and the figures we scribbled suggested I’m around £30k short of the asking price (which I’m not willing to pay, who does with houses!) without trying to work too hard and be in a potentially rough situation if the market collapses.
Now, that should be that, but this house is like a rash I can’t ignore! So, I appeal to the PH finance wizards to help me figure out if I can (unofficially) afford this place...
Very basic sums, I’m 27, I gross ~£50k which is guaranteed to go up by roughly 5% in the next year (unprovable until contract is reissued, but it’s a service increment of 2.5% plus union agreed pay rise of the same, you know the type).
The house I’m in now has a mortgage of ~£120k and just under 25 years remaining, and is worth somewhere between 165-175 depending on the demand - which of course isn’t the best at the mo.
I have a disposable income each month of around £800 after everything (not counting saving, which of course I should be doing more of) - so in theory I SHOULD be able to breeze it, but my borrowing repayments are quite high, a loan for a wedding I never ended up having (well done, me!) and a couple of 0% deals which all run for between 1-2 more years.
Half of me thinks I should concentrate on increasing my disposable and my ‘mortgageability’ will naturally increase, but this house is somewhat a dream property... is it worth pursuing or let this fish go and bide my time?
Sorry for the essay, I’ve been racking my brain on this for weeks! Any useful info or experience is appreciated, thanks all!
TL:DR, with mortgage of 120k and equity of up to 50k, I need to borrow another 90k ish (again, I’m not paying the asking price, why do you think it hasn’t sold!) is £50k per year enough with a bit too much debt?
So you want to pay £250k for the house?I few months ago I went for an appointment with my mortgage advisor (Natwest, if it matters) and the figures we scribbled suggested I’m around £30k short of the asking price (which I’m not willing to pay, who does with houses!) without trying to work too hard and be in a potentially rough situation if the market collapses.
Now, that should be that, but this house is like a rash I can’t ignore! So, I appeal to the PH finance wizards to help me figure out if I can (unofficially) afford this place...
Very basic sums, I’m 27, I gross ~£50k which is guaranteed to go up by roughly 5% in the next year (unprovable until contract is reissued, but it’s a service increment of 2.5% plus union agreed pay rise of the same, you know the type).
The house I’m in now has a mortgage of ~£120k and just under 25 years remaining, and is worth somewhere between 165-175 depending on the demand - which of course isn’t the best at the mo.
I have a disposable income each month of around £800 after everything (not counting saving, which of course I should be doing more of) - so in theory I SHOULD be able to breeze it, but my borrowing repayments are quite high, a loan for a wedding I never ended up having (well done, me!) and a couple of 0% deals which all run for between 1-2 more years.
Half of me thinks I should concentrate on increasing my disposable and my ‘mortgageability’ will naturally increase, but this house is somewhat a dream property... is it worth pursuing or let this fish go and bide my time?
Sorry for the essay, I’ve been racking my brain on this for weeks! Any useful info or experience is appreciated, thanks all!
TL:DR, with mortgage of 120k and equity of up to 50k, I need to borrow another 90k ish (again, I’m not paying the asking price, why do you think it hasn’t sold!) is £50k per year enough with a bit too much debt?
you have 50k deposit
You need a mortgage for 200K
If that's correct then I am not sure you will get it as its 4 times your salary but I am not a mortgage advisor or in finance, just life experience
Put the numbers in here and see what is says
https://www.nationwide.co.uk/products/mortgages/ou...
Back in 2013, when I bought my house, I was offered ~145k when I earned around 30k, and that was on a 95% LTV, so it’s possible.
Some more sleuthing is pointing me to the door, it seems - It would appear I’m rather stretching myself too far in this instance, and if the same house came up in, say, 3 years we’d be looking at a different story.
Alas, whilst comparison sites are suggesting there are lenders which will give me the needed amount and more, their terms are quite alarming in comparison to the deal I'm currently enjoying...
Anyone got the number of the couple who’ve just won £110m?
Some more sleuthing is pointing me to the door, it seems - It would appear I’m rather stretching myself too far in this instance, and if the same house came up in, say, 3 years we’d be looking at a different story.
Alas, whilst comparison sites are suggesting there are lenders which will give me the needed amount and more, their terms are quite alarming in comparison to the deal I'm currently enjoying...
Anyone got the number of the couple who’ve just won £110m?
OGR4M said:
There’s a house that’s been for sale near me for months, since August I think, and has only been reduced once in that time (£285k down to £280k, it ain’t worth that!).
I few months ago I went for an appointment with my mortgage advisor (Natwest, if it matters) and the figures we scribbled suggested I’m around £30k short of the asking price (which I’m not willing to pay, who does with houses!) without trying to work too hard and be in a potentially rough situation if the market collapses.
Now, that should be that, but this house is like a rash I can’t ignore! So, I appeal to the PH finance wizards to help me figure out if I can (unofficially) afford this place...
Very basic sums, I’m 27, I gross ~£50k which is guaranteed to go up by roughly 5% in the next year (unprovable until contract is reissued, but it’s a service increment of 2.5% plus union agreed pay rise of the same, you know the type).
The house I’m in now has a mortgage of ~£120k and just under 25 years remaining, and is worth somewhere between 165-175 depending on the demand - which of course isn’t the best at the mo.
I have a disposable income each month of around £800 after everything (not counting saving, which of course I should be doing more of) - so in theory I SHOULD be able to breeze it, but my borrowing repayments are quite high, a loan for a wedding I never ended up having (well done, me!) and a couple of 0% deals which all run for between 1-2 more years.
Half of me thinks I should concentrate on increasing my disposable and my ‘mortgageability’ will naturally increase, but this house is somewhat a dream property... is it worth pursuing or let this fish go and bide my time?
Sorry for the essay, I’ve been racking my brain on this for weeks! Any useful info or experience is appreciated, thanks all!
TL:DR, with mortgage of 120k and equity of up to 50k, I need to borrow another 90k ish (again, I’m not paying the asking price, why do you think it hasn’t sold!) is £50k per year enough with a bit too much debt?
Whilst you say you have £800 disposable income is this a true figure considering your debt. Personally with the figures above I would start paying down the debt quicker with some of your disposable income. I few months ago I went for an appointment with my mortgage advisor (Natwest, if it matters) and the figures we scribbled suggested I’m around £30k short of the asking price (which I’m not willing to pay, who does with houses!) without trying to work too hard and be in a potentially rough situation if the market collapses.
Now, that should be that, but this house is like a rash I can’t ignore! So, I appeal to the PH finance wizards to help me figure out if I can (unofficially) afford this place...
Very basic sums, I’m 27, I gross ~£50k which is guaranteed to go up by roughly 5% in the next year (unprovable until contract is reissued, but it’s a service increment of 2.5% plus union agreed pay rise of the same, you know the type).
The house I’m in now has a mortgage of ~£120k and just under 25 years remaining, and is worth somewhere between 165-175 depending on the demand - which of course isn’t the best at the mo.
I have a disposable income each month of around £800 after everything (not counting saving, which of course I should be doing more of) - so in theory I SHOULD be able to breeze it, but my borrowing repayments are quite high, a loan for a wedding I never ended up having (well done, me!) and a couple of 0% deals which all run for between 1-2 more years.
Half of me thinks I should concentrate on increasing my disposable and my ‘mortgageability’ will naturally increase, but this house is somewhat a dream property... is it worth pursuing or let this fish go and bide my time?
Sorry for the essay, I’ve been racking my brain on this for weeks! Any useful info or experience is appreciated, thanks all!
TL:DR, with mortgage of 120k and equity of up to 50k, I need to borrow another 90k ish (again, I’m not paying the asking price, why do you think it hasn’t sold!) is £50k per year enough with a bit too much debt?
A more expensive house “usually” leads to more expensive monthly outgoings, council tax utilities etc.
Get your self into a better position debt wise and another house will appear when you are in a better position.
Why do you think that the other house isn’t worth what what they are looking for but you are confident on getting what you think for your current property.
The seller may also not be in any rush to sell and is willing to hold out for what they want.
Hopefully you don’t see this as being negative just looking at it from another side.
Good luck with whatever way you progress.
Multiples don’t matter anymore. It’s based on affordability at a stressed rate to ensure if rates rise you can still afford the mortgage and your other outgoings
Based on the property not selling, I would try and reduce the cost of it through negotiating - hopefully then it might work with mainstream lenders so you get a decent rate.
Best of luck
Based on the property not selling, I would try and reduce the cost of it through negotiating - hopefully then it might work with mainstream lenders so you get a decent rate.
Best of luck
OGR4M said:
There’s a house that’s been for sale near me for months, since August I think, and has only been reduced once in that time (£285k down to £280k, it ain’t worth that!).
I few months ago I went for an appointment with my mortgage advisor (Natwest, if it matters) and the figures we scribbled suggested I’m around £30k short of the asking price (which I’m not willing to pay, who does with houses!) without trying to work too hard and be in a potentially rough situation if the market collapses.
Now, that should be that, but this house is like a rash I can’t ignore! So, I appeal to the PH finance wizards to help me figure out if I can (unofficially) afford this place...
Very basic sums, I’m 27, I gross ~£50k which is guaranteed to go up by roughly 5% in the next year (unprovable until contract is reissued, but it’s a service increment of 2.5% plus union agreed pay rise of the same, you know the type).
The house I’m in now has a mortgage of ~£120k and just under 25 years remaining, and is worth somewhere between 165-175 depending on the demand - which of course isn’t the best at the mo.
I have a disposable income each month of around £800 after everything (not counting saving, which of course I should be doing more of) - so in theory I SHOULD be able to breeze it, but my borrowing repayments are quite high, a loan for a wedding I never ended up having (well done, me!) and a couple of 0% deals which all run for between 1-2 more years.
Half of me thinks I should concentrate on increasing my disposable and my ‘mortgageability’ will naturally increase, but this house is somewhat a dream property... is it worth pursuing or let this fish go and bide my time?
Sorry for the essay, I’ve been racking my brain on this for weeks! Any useful info or experience is appreciated, thanks all!
TL:DR, with mortgage of 120k and equity of up to 50k, I need to borrow another 90k ish (again, I’m not paying the asking price, why do you think it hasn’t sold!) is £50k per year enough with a bit too much debt?
OP.........whats the total balance owed on cards? And the loan monthly payment? Any other credit commitments?I few months ago I went for an appointment with my mortgage advisor (Natwest, if it matters) and the figures we scribbled suggested I’m around £30k short of the asking price (which I’m not willing to pay, who does with houses!) without trying to work too hard and be in a potentially rough situation if the market collapses.
Now, that should be that, but this house is like a rash I can’t ignore! So, I appeal to the PH finance wizards to help me figure out if I can (unofficially) afford this place...
Very basic sums, I’m 27, I gross ~£50k which is guaranteed to go up by roughly 5% in the next year (unprovable until contract is reissued, but it’s a service increment of 2.5% plus union agreed pay rise of the same, you know the type).
The house I’m in now has a mortgage of ~£120k and just under 25 years remaining, and is worth somewhere between 165-175 depending on the demand - which of course isn’t the best at the mo.
I have a disposable income each month of around £800 after everything (not counting saving, which of course I should be doing more of) - so in theory I SHOULD be able to breeze it, but my borrowing repayments are quite high, a loan for a wedding I never ended up having (well done, me!) and a couple of 0% deals which all run for between 1-2 more years.
Half of me thinks I should concentrate on increasing my disposable and my ‘mortgageability’ will naturally increase, but this house is somewhat a dream property... is it worth pursuing or let this fish go and bide my time?
Sorry for the essay, I’ve been racking my brain on this for weeks! Any useful info or experience is appreciated, thanks all!
TL:DR, with mortgage of 120k and equity of up to 50k, I need to borrow another 90k ish (again, I’m not paying the asking price, why do you think it hasn’t sold!) is £50k per year enough with a bit too much debt?
What does "gross income of £50k" mean? How much of that is basic pay? Overtime? Bonus? Commission?
Also, thanks Kieran & Julian!
Sarnie said:
OP.........whats the total balance owed on cards? And the loan monthly payment? Any other credit commitments?
What does "gross income of £50k" mean? How much of that is basic pay? Overtime? Bonus? Commission?
The man himself - I feel I’ve left out a few vital details, but I snuck a post in at work, so don’t tell anyone!What does "gross income of £50k" mean? How much of that is basic pay? Overtime? Bonus? Commission?
Gross £50k is more-or-less the total of what I earned last tax year - so everything bundled in. The reason I decided to count the extras, overtime and bonuses account for about £8k of that, is because this was done with my initial mortgage 5 years ago, and is ‘standard practise these days’ (or so Natwest said at the time) as my contract lists the overtime rates and are therefore a guaranteed income as long as I don’t stop working them.
My total outstanding debt is roughly 16k, most of which (13k plus change) is a personal loan at 3.4% and then two 0% finance deals to make the rest... seems rather awful when I put it that way! Credit cards used for fuel and food, cleared in full each month.
I have to pay £150 child maintenance PCM (rather begrudgingly, but I don’t make the rules!) and obviously all associated household bills.
As mentioned above, something which I hadn’t given too serious a thought, was all of the bills included - council tax and utilities etc on a house which is probably 20-30% larger than my own.
Any advice you can give or directions to which you can point are greatly appreciated, but multiple minds have quickly made me realise that, even if granted the extra funds, I could get myself into financial trouble if not careful
Thanks all, you’ve made sense of some flawed maths in my head!
tighnamara said:
Whilst you say you have £800 disposable income is this a true figure considering your debt. Personally with the figures above I would start paying down the debt quicker with some of your disposable income.
A more expensive house “usually” leads to more expensive monthly outgoings, council tax utilities etc.
Get your self into a better position debt wise and another house will appear when you are in a better position.
Why do you think that the other house isn’t worth what what they are looking for but you are confident on getting what you think for your current property.
The seller may also not be in any rush to sell and is willing to hold out for what they want.
Hopefully you don’t see this as being negative just looking at it from another side.
Good luck with whatever way you progress.
Can’t do multiple quotes on mobile without faff!A more expensive house “usually” leads to more expensive monthly outgoings, council tax utilities etc.
Get your self into a better position debt wise and another house will appear when you are in a better position.
Why do you think that the other house isn’t worth what what they are looking for but you are confident on getting what you think for your current property.
The seller may also not be in any rush to sell and is willing to hold out for what they want.
Hopefully you don’t see this as being negative just looking at it from another side.
Good luck with whatever way you progress.
Great input, much appreciated!
Regarding the disposable, I'm currently using that to chip the debt away and fix a couple of niggles with my house each month, so you’re right in that the TRUE figure is lower once I’ve spent throughout the month.
As for the asking price - the house appears to be furnished but vacant, and it’s simply an educated guess on my part based on a house 2 doors down (with 5 bedrooms vs 3 and a box room behind the garage) has sold after 4 months with an asking price of 280k
I struggle to believe that a smaller house on the same street in much the same condition (haven’t viewed either, importantly) could possibly sell for the same price. But you’ve made another good point that the seller may want 280k and not a penny less - their choice!
For some reason, the street I’m on now (which is adjacent to the potential house) sells houses very quickly, assuming they’re priced correctly. A rather dilapidated ‘doer upper’ directly opposite mind sold a year ago for 140k inside 24 hours, so my house should (important word, that!) sell in a timely manner for a measure more - but I’ve been wrong before!
OGR4M said:
The man himself - I feel I’ve left out a few vital details, but I snuck a post in at work, so don’t tell anyone!
Gross £50k is more-or-less the total of what I earned last tax year - so everything bundled in. The reason I decided to count the extras, overtime and bonuses account for about £8k of that, is because this was done with my initial mortgage 5 years ago, and is ‘standard practise these days’ (or so Natwest said at the time) as my contract lists the overtime rates and are therefore a guaranteed income as long as I don’t stop working them.
My total outstanding debt is roughly 16k, most of which (13k plus change) is a personal loan at 3.4% and then two 0% finance deals to make the rest... seems rather awful when I put it that way! Credit cards used for fuel and food, cleared in full each month.
I have to pay £150 child maintenance PCM (rather begrudgingly, but I don’t make the rules!) and obviously all associated household bills.
As mentioned above, something which I hadn’t given too serious a thought, was all of the bills included - council tax and utilities etc on a house which is probably 20-30% larger than my own.
Any advice you can give or directions to which you can point are greatly appreciated, but multiple minds have quickly made me realise that, even if granted the extra funds, I could get myself into financial trouble if not careful
Thanks all, you’ve made sense of some flawed maths in my head!
You didn't actually detail the monthly payments of your finance agreements.......Gross £50k is more-or-less the total of what I earned last tax year - so everything bundled in. The reason I decided to count the extras, overtime and bonuses account for about £8k of that, is because this was done with my initial mortgage 5 years ago, and is ‘standard practise these days’ (or so Natwest said at the time) as my contract lists the overtime rates and are therefore a guaranteed income as long as I don’t stop working them.
My total outstanding debt is roughly 16k, most of which (13k plus change) is a personal loan at 3.4% and then two 0% finance deals to make the rest... seems rather awful when I put it that way! Credit cards used for fuel and food, cleared in full each month.
I have to pay £150 child maintenance PCM (rather begrudgingly, but I don’t make the rules!) and obviously all associated household bills.
As mentioned above, something which I hadn’t given too serious a thought, was all of the bills included - council tax and utilities etc on a house which is probably 20-30% larger than my own.
Any advice you can give or directions to which you can point are greatly appreciated, but multiple minds have quickly made me realise that, even if granted the extra funds, I could get myself into financial trouble if not careful
Thanks all, you’ve made sense of some flawed maths in my head!
With regards to;
"Gross £50k is more-or-less the total of what I earned last tax year - so everything bundled in. The reason I decided to count the extras, overtime and bonuses account for about £8k of that, is because this was done with my initial mortgage 5 years ago, and is ‘standard practise these days’ (or so Natwest said at the time) as my contract lists the overtime rates and are therefore a guaranteed income as long as I don’t stop working them. "
Unfortunately thats not standard practice at all...........even Natwest wouldn't lend based on your last years earnings........they will work off your last three months payslips and the YTD figure on your latest payslip...........no lender will lend against what you earnt a year ago alone.........your P60 may say $50k but if you've done no overtime all year and your current pay slip YTD figure only shows you on track to earn £42k, thats what they are going to lend against........
Sarnie said:
Unfortunately thats not standard practice at all...........even Natwest wouldn't lend based on your last years earnings........they will work off your last three months payslips and the YTD figure on your latest payslip...........no lender will lend against what you earnt a year ago alone.........your P60 may say $50k but if you've done no overtime all year and your current pay slip YTD figure only shows you on track to earn £42k, thats what they are going to lend against........
Brain fade from me - when I applied for my first mortgage they looked at my earnings and essentially grossed up to a year, and when I mentioned the overtime etc they didn’t change the figure.But, you’re absolutely right of course, and you’ve echoed my appointment some months ago, in that just because I earned X last year doesn’t mean I’m still earning that. They can obviously only go only guaranteed income minus committed expenditure.
Unsurprisingly seeing as I couldn’t afford it back in autumn, I still can’t afford it! Don’t really know what made me think that it was a possibility, hope someone buys the bloody place now so I can stop thinking about it!
Many thanks for the voice of reason - I’ll keep my head down and get in a better position in a few years
I stretched myself to move home and its the best thing I have ever done.
Do not (as you haven't) underestimate the increased costs, my CT went from £140 to £215, heating / water up around 40%, etc, happiness, privacy, peace and quiet, space for the cars, huge garden, priceless.
I have recently took a mortgage with Natwest (who I was with anyway) and as Sarnie said they would only take into account the three months payslips, even though I had proof of my bonus for the past 4/5 years they wouldn't take it into account.
I'd do it, in a few years that 280k house might be 350k and you'll be even further away (arguably it could be 220k!)
I went from 90k outstanding to 230k
Do not (as you haven't) underestimate the increased costs, my CT went from £140 to £215, heating / water up around 40%, etc, happiness, privacy, peace and quiet, space for the cars, huge garden, priceless.
I have recently took a mortgage with Natwest (who I was with anyway) and as Sarnie said they would only take into account the three months payslips, even though I had proof of my bonus for the past 4/5 years they wouldn't take it into account.
I'd do it, in a few years that 280k house might be 350k and you'll be even further away (arguably it could be 220k!)
I went from 90k outstanding to 230k
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