#Mortgage #Finance #HomeOwnership
Hey everyone! I’m in a bit of a pickle with my mortgage situation and could really use some advice. 🏡💸
So here’s the deal: I have a $3100 mortgage on a $720k house, which feels pretty steep given our joint income of $8000 and monthly expenses totaling $6500. I’m wondering if it makes sense to tough it out for about 8 years in the house before selling it. Will this change the situation and make the high mortgage more manageable in the long run?
Additional expenses include:
– Travel: £680
– Bills: £500
– Food: £600
– Council Tax: £220
There are other outgoings to consider as well, like going out, gym fees, car upgrades, and insurance costs. It’s definitely a lot to juggle! 🤯
Do you guys think it’s a good idea to stick it out for a few years or should I consider other options? Any tips or suggestions would be greatly appreciated! Let’s help each other out! 💡🤝
No one knows.
In 8 years you might be earning twice as much and interest rates might be back at 0.25%, which which case you’ll be fine. Or your salaries might stagnate, interest rates could double, and you’ll be completely screwed when you try and remortgage.
House prices might have doubled, and you can sell and make a nice profit. Or we might be in a recession and you’ll find yourself in negative equity.
And having children will both significantly increase your costs, and mean that either one of you stops working or you need to pay someone else a lot of money to look after your children for you – neither of which you can really afford if you’re that close to the wire.
I’d look at the other £3400 that’s included in the monthly expenses.
I’m guessing leased cars/holidays/savings are a part of that?
Can you clarify what your question is? I don’t quite follow sorry.
Need a better breakdown of the 3400 and a clear question. On the surface you’re sailing close to the wind but you possibly aren’t depending on the 3400.
Is the house worth not having(or at least less) holidays, not replacing cars for an extra 3 years, less meals out?
Those lifestyle adjustments would likely covers the difference.
Mortgages get relatively cheaper over time due to inflation. (With everything else being equal).
But as others have said the volatility is in income, house price, interest rates, kids, health, life itself.
Personally I’ve found a that being stretched for a few years is worth it. But I’ve not had a life crisis at the same time.
Make an informed choice, just don’t skimp on lifestyle adjustments and get into consumer debt.
I wouldn’t be able to sleep with that size mortgage 😂 would be in constant fear of one of us loosing our job, you need a pretty big emergency fund in case the worst happens, probably 20k at least
Calculation should look at few things.
1. What is the cost of renting in the same area. And the what is that in relation to interest payments vs. Capital repayment. When you look through that lens, at least you are banking repayment, and interest should be covered if you need to rent the place out or if you move to interest only repayment temporarily (on that note check that kind of mortgage, as you can usually overpay but you have some comfort should things goes south.
2. Earning potential vs interest hikes.
3. Single salary income, what happens if you are without a salary for 6 months.
4. Children are expensive especially in the first 3 years.
5. Make sure the place can accommodate children. If they come along they start taking a lot of space.
6. Feel confident in your decision not necessarily comfortable.
This is quite inefficient as you’re paying a lot of interest on a high value mortgage up front.
Also it’s a lot of stamp duty to pay for a house that you’ll scale back from going forward.
Personally I’d avoid. Take a lower value property and plan to move somewhere larger when you have children.
I don’t want to put you off kids, I love my three, but they are not cheap and get more expensive over time. You need to do some financial family planning.
Two of you are spending £600 a month on food? £680 on travel? With a further £500 on other bills? Respectfully, that’s an insane budget and you should be fixing this before buying neck end of 3/4 of a mil property.
Am I reading this right? Your expenses are 3100 + 6500 = 9600
Your income is 8000?
If that’s the case you can’t afford this, you’d be 1600 over budget every month. Although that’s a huge budget so I’m assuming that’s not your situation?
If the 6500 includes the 3100, then you have 1500 a month spare, and you’ll probably be fine if you don’t go crazy and spend it all…
8 years is a long time, even if it’s a fraction of the 35 year mortgage, what is your plan if one of you loses your job, or can’t work? You mention children, unless you have a great maternity / paternity pay package you’ll be losing income, and need to spend money on the kids (Kids are expensive, really expensive).
Don’t have savings? Do you have a safety net? Could you buy a smaller house and upgrade when you need the bigger house?
Your question doesn’t seem any different from the previous one. No one knows what will happen in 8 years. The fact you’re stressing about it probably means that 3100 is too high for you personally. Wouldn’t bother me but everyone is different.
Do you have or plan to have children? If you do, this budget will never work.