Should we borrow €460k on an income of €84k ?

i was thinking of something last night. if 460K is too much to borrow on a salary of 84K, what do people think should be the maximum we should borrow? i realise that its dependant on a few things like what interest rate/mortgage package is offered etc. but generally anyone want to throw me a few figures????

burger1979
 
I got some great advise a few years ago to think carefully about getting a mortgage where the monthly repayments were more than a third of my take home pay.

Recent years of low interest rates may make it seem as if that advise is now too stringent but with the future movement of ECB rates a mystery, though with Eurozone inflation on the up and up further increases can not be ruled out, I wouldn't stray too far from that benchmark if you want to have a life as well as having a home!
 
askalotRe: Should we borrow €460k on an income of €84k ?
I got some great advise a few years ago to think carefully about getting a mortgage where the monthly repayments were more than a third of my take home pay.
Click to expand...

I followed that advise as well askalot.

Burger, I would perhaps work out what 30% of your joint take home salary is each month and this is the very max I would want to be spending on mortgage repayments.
 
I would agree with the previous 2 posters. 30% should allow for any unforeseen events (like babies, one of you losing a job etc) Its best not to leave yourself open to 35 years of struggling to pay back a mortgage.
Also would you consider buying a house that needed a bit of work doing to it or had room to extend, that way you will be able to increase value to it in the future and will allow you to stay it in for longer.
 
i was thinking that 33-35% max should be spent on the mortgage repayments. this should leave us with enough money for bills and savings and also some expenditure money.
 
I'd say 30-35% of you net income is about right. BUT remember if you are doing this with a 30-40 year loan you are paying 100's of thousands more in interest to the bank than you would if you could do it over 20-25 years.Keep the lenght of the loan as short as possible.

HAve you looked at the senario of what would happen if you had to live of one income? could you? You have good savings to use in a critical situation at the momment but will you be using this saftely net when buying the house? Some say you should have 6 months salary at least stuck away just in case but this is not practical for most.

Rememeber lifestyle and quality of life could be important factors, depend on your priorities in life. We aren't around for that long so is a house important to you or do you want to eat out, have 2-3 holidays a year, have children with out having to worry about money etc.

There is a balance some where, depending on what you want out of life. I am lucky enough to earn a good 6 figure salary but have choosen to live in a normal 3 bed end of terrace as I didn't want a mortage over more than 20 years.

Friends have more debt, bigger houses and more money worries. As a family with 2 kids we have a great great quality of life which I would not change!

It personal preference but worth thinking about.
 
whoops pressed the button twice so i've deleted by duplicate post!! Sorry
 
Just as an update we have decided to buy a house in navan. the mortgage will be equal to 30% of our net income, roughly. thanks to everyone for their input/comments. our bid for the house was accepted this morning and we are going to proceed with the sale.
now if anyone wants to contribute to the burger mortgage fund then please do so!!!!!
 
Congratulations! You sound like you have done this with out financially stretching yourselves. Good luck in your new home.
 
you must be mad getting a morgage that size ,how about buying somethin
more affordable to get you on the property ladder then upgrading later ,you will be living beyond your means ,when a family arrives circumstances change,you really need to think more carefully,
 
Funkylady, I disagree, I think now’s the time to push the boat out (within reason) there’s little sense now to be buying a stop gap of a house and forking out thousands on stamp duty, solicitors & furnishings & then do it all again a few years down the road when a larger house becomes more affordable.
 
Funkylady: our mortgage will only be 391K rather than the 460K mentioned in the heading of the thread. we eventually decided that 460K or close too was too much and would be stretching ourselves should our circumstances change.
 
Congratulations Burger, sounds like you made a good move. I'd say you got a great house in Navan for that money.

Funkylady, I would not agree with your post. FTB's are now being advised to buy their second house first (so to speak) as it is not just about getting on the property ladder anymore. If a ftb can save and buy a better house now (even if this means stretching themselves a bit at the start), chances are they will get it for a good price, spend many years there and avoid having to pay hefty stamp in a couple of years along with all the other expenses of moving.
 
Pope John 11: yeah i lived in navan for 3 weeks and done the commute and in the morning it was grand i was up and out the door by 6.15am which is only 15 mins before i normally leave. then on the way back to navan it took me about 1.5 hours on average. now that might seem like alot and it is. but since i have been doing the journey back to raheny by luas and dart it has been taking me the roughly the same amount of time so its not really much of a difference in the commute time. also my finace has given me some handy tips for the back roads to get back to navan quicker (around dunshaughlin is one).

as for the rail link i will believe it when i see it
gonna miss the train to be honest i have had it easy living in raheny and getting the dart in and out of town, and the relative ease of it all.
 
God that's a big jump in location. Are you not worried you might see a house for sale in Raheny for 425k in a year or two? I'm presuming you have family in Raheny and that is a major part of your decision. When you have kids you will realise how great it is to be close to family, esp. for babysitting!
Also - what if you miss the sea?!
The two investors (stage) whispering high offers that will be automatically rejected is the fishy-est thing I've heard in a long time and I'm not the paranoid I hate estate agents type. Who the hell loudly makes an offer to the estate agent in the house with other people around? And TWO investors in this market?? Ring around a few E.A.'s and ask them how likely is that.
 
moneygrower: yeah big jump in location for me but not for my finace as she is from there. a house for sale in raheny for 425 would be dificult especially for the type of house that we wanted and one that would suit our future needs.

as for the sea well dollymount is nothing to get excited about these days

and the investors, well thats another thing altogether, that EA got himself in a complete fuddle about that house and couldnt answer the q's we asked about it etc. etc. so we put a bid in, it was rejected by him cos he said that there was a better offer on it so we left it at that.
 
came across this old thread , not sure how, feel sorry for the buyer/borrower here but i guess none of us knows the future ( then or now)
 
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