Am I stupid, thinking about buying a £185,000 house?

[RHCP]

A house has come up for sale in the next road to my parents for £185,000, with offers considered for a quick sale.

The house next door to is is going for £270,000.

The problem is that me and my girlfriends joint income is only £40,000.

I was thinking about offering £170,000. We have about £10,000 savings.

Is this too much or should i be thinking about something a bit cheaper.

Cheers for any input

[CFC1]

I think you should investigate why it is £85,000 cheaper than the house next door!

[RHCP]

The house next door, has five bedrooms and a conservatory. The one I'm looking at has four bedrooms.

[adam4478]

personally i'd go a bit further away from the parents

[shodan]

When it comes to houses I think a person should get the best (probably mean most expensive) house you can comfortably afford. It's okay stretching yourself a bit, just don't skint yourself each month as you never know when you'll need to pay out for something expensive uneccepted.

Although do bear in mind there are "hidden" costs to buying a house. Think up to 5 grand for fee's, and you have to have house insurence before you can get the mortgage signed over....

[Mep]

I know it's obvious but you need to work out (very accurately) all monthly costs involved, utilities, food, cars, AV, etc, etc and ensure you can afford the mortgage. Ideally you should have at least a 10% deposit otherwise you wont get the best mortgage rate...consider costs of moving...legal fees, stamp duty, etc ......do you have a place to sell?

[RHCP]

Nope, no place to sell.

[CFC1]

Still, that's a lot of money for a conservatory and a bedroom... why are the sellers wanting a quick sale, when they could go through the usual channels and get probably get more money? Mate, I am cautious by nature and am of the opinion that, if a deal looks too good to be true, then it probably is!
It is a massive step for you both and no matter how quickly the seller wants to deal, make sure you have a thorough survey done, to identify any actual/potential problems and also to advise whether the property is worth the money they are asking.

[krish]

I'm not sure you'd get a non-guarantor joint mortgage of £160K on that joint income, since lenders see co-buying couples as a greater risk

secondly you could be struggling with the repayments on that joint income ... just by comparison with my own lower loan and lower (than present) interest rate mortage .. £100K @ 4.39% = £549/month

- as others have mentioned utilities, CT, etc - adding up my DDs ... my own gas-elec-water-phone-broadband-mobile-TV Licence-home insurance-council tax = £230/month (I don't have Sky/NTL and have pretty good deals/tariffs with the utilities and phone/mobile/ISP)

anyway the stuff about the mortgage is anecdotal ... perhaps a mortgage professional here can clarify those points; or you may already have an agreement in principle and started budgeting for that

[RHCP]

No, i haven't even applied for a mortgage.

I know Abbey National do 5X joint income, which i know can be dangerous.

I'm going to inquire today about how much they can lend us.

So, £185,000 does seem a bit to high to aim for.

A friend has just bought a new build, which is nice but small. I couldn't live there for long. I know that he wants a bigger house in the future. He paid £135,000, i just think for another £40-50 grand i could get a nice big house for life.

[signs]

is it feasible that if you brought the house, you could maybe move a lodger in one of the spare rooms ,to help ease the bills etc

p.s a bit of advise given to me was "make sure you buy the worst house in the best area , not the best house in the worst area" (I'm sure this wont apply to this purchase , but it's worth keeping in mind.

[RugbyAl]

You may struggle at first, most people do when they start on the property ladder, but be sensible with your money and you wont regret it. I have just moved house (285k) and have a mortgage of approx 145k. My wife and I have a joint income about the same as yours but have childcare costs of about £220 PCM. We are surviving fine!

I have always found that within 2-3 years of moving house/increasing a mortgage, things get a lot easier financially.

[signs]

Originally Posted by RugbyAl

You may struggle at first, most people do when they start on the property ladder, but be sensible with your money and you wont regret it. I have just moved house (285k) and have a mortgage of approx 145k. My wife and I have a joint income about the same as yours but have childcare costs of about £220 PCM. We are surviving fine!

I have always found that within 2-3 years of moving house/increasing a mortgage, things get a lot easier financially.

i agree
i think you should push yourself , it will be hard short term , but long term you will reap the benefits

[neilmcl]

I think you should at least have a look at the place. The reason it's so cheap could possibly be because it needs quite a bit of work doing to it and if you're going to be struggling just to get the mortgage then how will you finance any of that.

[krish]

yep I'm probably out of date about the mortgage sum you could be offered

assuming you will be offered exactly what you want ...
forensically examine all the fixed outgoings
- I bought my new build (3 bed semi) towards end of '05, and was initially shocked at everything I had to budget for (before, during and after), but it gets quite manageable

Obviously there are all these buyer's hidden costs -
solicitors' conveyancing can be £500 - £800+
stamp duty @ 1% (www.hmrc.gov.uk/so/current_sdlt_rates.htm)
lender's valuation and mortgage arrangement fees can be an extra £500-£600
... also you might want to get a survey done (prices anyone?)

Just to illustrate furniture costs (not important right now) ... based on my own purchases - leather sofas (3 piece) £420; 2 king size wooden beadsteads + mattresses (duvets, pillows, cases, protectors all thrown in) £900; dining table and six chairs £400
- these were all purchased during sales along with a fair amount of haggling and getting free delivery and extended guarantees; so for a while I was using boxes, old chairs, sleeping bags etc. I have also been using Freecyle - and have picked up some perfect condition wooden bookcases and cabinets from people moving out of the UK.