I have been living in London for only a year and would eventually like to buy a house here. What sort of percentage of your salary would you use for mortgage repayments? I know it depends on lifestyle, but when looking at mortgage calculations, it seems that I will never be able to buy!!! Do Londoners scrimp on quality of life to buy a house, do they get a lot of financial help from their families, or do they move to very dirt cheap (and rough) places to get on the property ladder?
2007-03-22 02:55:48 · 7 answers · asked by jnnfrlindsey 1 in Business & Finance ➔ Renting & Real Estate
I have a husband who works full time also. We collectively earn about £30k, but are renting for £750pcm.
2007-03-22 03:07:24 · update #1
Oops, I mean collectively we earn about £50k.
2007-03-22 03:08:23 · update #2
I advise that you rent until you can save enough of a down payment to keep mortgage/housing expenses below 40% of your take home pay. This is conservative advice.
I live in the Midwestern United States. Financial counseling organizations (see below) generally recommend keeping your total housing expenses to under 35%-40% of your total take-home income. This would include mortgage or rent, property taxes, insurance and utilities.
Unfortunately, I didn't take this advice when I bought my first home, and am feeling the strain. I bought a $182,500 home, 80% financed in a 15-yr bank mortgage, and the other 20% in a 5-yr family loan, which we are trying to pay off in only 3 years.
My housing expenses are around $2200 per month, plus an additional $500 extra payment, for $2700 per month, which is about 60% of my take home. It is suffocating!!! Luckily in another year, when the family loan is paid, this will drop to $1700, or 39% of monthly take home. This will be much more maneagable.
2007-03-22 03:23:10 · answer #1 · answered by J C 2 · 0⤊ 0⤋
I have been doing alot of reading on this matter because we have been struggling financially since we bought our house 15 years ago. It seems we are spending 49% of our yearly salary on housing, which does not include just the mortgage. You have to include insurance, taxes, electricity, water, sewer, garbage, phone, cable, Internet, heating and maintenance. You have to consider these costs from your net salary and it should not exceed a certain percentage based on your salary. We collectively make 68,000 per year and it should not exceed 26%. The higher your salary, the lower the percentage, the lower your salary, the higher your percentage. Don't get in too deep, it's not worth it !
2007-03-22 04:36:36 · answer #2 · answered by Karen 2 · 1⤊ 0⤋
I don't know the answer to the salary question. However, I am getting ready to purchase a very cheap home because I want to fix it up. It will be NICE when I am done with it and worth a lot more than what I am paying for it. So if you like to paint and that sort of thing, you may want to try that. Get a home with good basic structure even if it's not pretty, then fix it up. I am going to have to hire some of the work done, but a large amount of it, I can do myself.
Good luck!
2007-03-22 02:59:19 · answer #3 · answered by martinmagini 6 · 1⤊ 0⤋
I have heard that some people pay 75% of their salary
You are better buying a 3-4 bed house with friends
Some people have alovely house on their own and are on the breadline
I like the idea of buying property abroad
I use this website Onetill .com
2007-03-24 00:33:13 · answer #4 · answered by thebigemailstar 1 · 0⤊ 0⤋
I'll start off by saying I don't know London real estate. However, that shouldn't matter. Historically, they used to figure 25% of your income for housing, now that figure has risen, to about 40%. If you go above that figure you are spending almost half your wages for housing and that doesn't include the upkeep or furnishing the home either.
I do know the price of housing in London is absurd. and I wish you the best of luck in finding a house. Just be careful and don't get in over your head.
Hopefully, your parents may be able to donate to your down payment even if it is an off the books loan.
2007-03-22 03:09:59 · answer #5 · answered by Fordman 7 · 0⤊ 1⤋
It depends what you earn. When I move I am expecting to spend about 60% of my salary on my mortgage.
You need to get married or find someone to get a joint mortgage with.
2007-03-22 02:59:17 · answer #6 · answered by Anonymous · 0⤊ 1⤋
i always wonder, cos people would have to slave away 24/7 becasue like a 3 bedroom house cost 250,000 and thats a lot, seen as people that go university, go on to make 24,000 a year which is 500 pounds a week,
2007-03-22 03:07:18 · answer #7 · answered by Anonymous · 0⤊ 1⤋