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Thread: Buying a house- Spend as much as you can afford?

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    Regular Member Andy's Avatar
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    Default Buying a house- Spend as much as you can afford?

    Bit of a quandry,

    Started to look at houses and what we can afford. We are moving from an upstairs masionette to a 'family' house with a garden, garage, drive etc etc

    We have a budget of between £165K and £200K and have seen plenty of houses we like within this range.

    The problem is, when it comes to things like this, i start getting nervous. I look at the mortgage payment and i start to worry about things like how would we pay it if i lost my job etc?

    Should we stick to the lower end of our budget, which works out roughly what we are paying comfortably now, (after weve played with a few figures, current loans etc etc) or should we buy the most expensive house we can afford.

    You dont always get what you pay for, but in the examples we have seen, you dont get a huge amount of space for £165K, but you do tick all our boxes of requirements. For £200K weve seen a number of houses we really really like, and we can afford the payments, albeit at the top end of our limits, providing i never lose my job.

    Am i worrying to much? is everyone in the same position? ie no job=no mortagage payment.... is the old saying true, ie buy the best you can afford etc

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    [Ex]Admin Duncan's Avatar
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    I think a lot of people are possibly in a similar boat - especially if they've bought in recent years and have a large mortgage.

    I think the sensible thing to do is to end up with a mortage payment that you are comfortable with BUT that you could still manage if interest rates went up. You may consider getting a fixed rate for a year or two for example - but an Independant Mortgage Advisor can help you with that.

    Many people are going to be in the same quandry i.e. lose their job, ultimately not be able to pay the mortgage, whether it's an 'average' one or a large one.

    D

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    Basically what Duncan has just said. Having said that my personal opinion is that the Bank of England wants people to start spending in the shops, so putting the Interest Rate up would not help this. So, get the best you can find/afford matey.

    If you haven't got a mortgage advisor, can I recommend mine. You don't have to pay her a penny she gets paid by the motgage company you finally choose. She's based in Wilberfoss (near York), so I'm guessing this is good for you.

    Her details -
    Julie Griffiths MLIA (Dip)
    16 Main Street
    Wilberfoss
    YO14 5NN

    Tel: 01759 380355
    Mobile: 07946 618619

    I found the best deal I could get and she beat it by a mile. She also organises all the insurances for you as well. It'll cost you nothing for her to do a search for you!

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    Also consider taking insurance against redundancy, as I have - which secures payment of the mortgage if things go wrong.

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    Regular Member Doug-SRidirect's Avatar
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    Always worked for me - getting the biggest mortgage I could afford. You reap the benefits in the long term.
    Regardless of the size of your loan, you're in trouble if you lose your job - so best not to think about it - and go for the 'biggie'!
    My advise, get a house in the best area you can afford.
    Just my opinion. Good luck.
    Doug

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    Regular Member Harry's Avatar
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    my girlfriend and i moved into our house in november 2005, we went for as much as we can afford, because as Doug said, we're hoping to benefit from it in the future. The house itself was within budget but needed cosmetic work doing which we knew would put an extra strain on the finances.

    So go for broke and get the most you can afford with redundancy protection as kitchpoo said if you think your job will be under threat. A fixed price mortgage is always helpful IMO.

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    we have just moved to a house from a flat in october last year so have just went through all your emotions....will i...wont i.

    In the end we went for the middle of our budget because we found a house that needed quite abit of work and moved very swiftly to get ahead of the others. In doing this we had purchased our new house but hadnt sold our flat , all i can say is thank f00k it worked out as it would of been expensive.

    I would imagine the property market is pretty boyant where you are so it really depends on if you find the perfect house, also as POO says take the insurance against losing your job, helps if you have to stretch yourself.

    Best of luck

    Steven

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    thanks for the advice guys, we have a finanncial adviser coming on saturday to see us, as part of one of the estate agents packages. Our house is getting valued tommorrow so it will give us an more exact figure for our budget, rather than just guessing what ours is worth.

    The way ive looked at it recently is, if we buy a house for £165, im sure it will be great for a few months, but then we might start thinking, 'if only we'd spent that extra £150 a month', as the £200K houses are much nicer. I agree that if i lost my job, i'd have as much trouble paying a £750 a month mortgage as i would a £900 one so guess im just getting the collywobbles

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    Regular Member Harry's Avatar
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    you're spot on there Andy, get the best you can afford and you won't regret it.

    an option you may like to consider is taking out a 'interest only' mortgage which allows you to overpay without any penalties, you can normally pay up to 10% of the capital per year. Gives a bit of breathing space because the money flies out the door for the first few months, especially if there is work that needs doing.

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    Regular Member Andy's Avatar
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    Well insurance gets tricky as im freelance and work for an invisible limited company.The mortgage isnt a problem as my accountant people have ways round that, but i cant really take out redundancy insurance as im never actually "employed" by anyone. I can take out accident insurance though, and i think i'll opt for one that insures a set amount of income, eg £800 a month income for £20pm etc as well as pays off my mortgage should i get run over and die.

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