Trading up mortgage with debt

mrsk

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We have a mortgage of €155k on house worth €230-240k. Approx 19 years left on mortgage.
Neighbours house sold recently for €240.

We also have credit union loans of €26k and credit card debt of €8500.
We are paying back approx €1080 on mortgage/insurance per month, €1450 to credit union per month. And minimum payments around €360-400 on 3 credit cards.
Also creche fees of €1200.
After paying mortgage/debts/health insurance and complusory pension deductions We are left with approx €250 per week

If we sell the house for €230k we could clear all our loans and have a deposit to trade up.

Our current home is very small and we have two childen so would love to trade up.
We are public servants earning approx €98k per year but have complusory pensions deducted from that.
44 year old and 41 year old.


We have never missed any payments and have made huge inroads into our stupid cu and cc debts over the last 4/5 years.

Do you think we would qualify for a mortgage if all our outstanding debts were cleared upon the sale of our home.

We would be looking for approx €250k

Or should we sell the house, clear debts and rent for a year before approaching bank?
 
We also have credit union loans of €26k and credit card debt of €8500.

...
And minimum payments around €360-400 on 3 credit cards.

If you have built up this level of unsecured debt, why do you think you will be able to afford the additional €600 a month in repayments on your mortgage?

You probably need to go to MABS and get some budgeting advice.

You refer to a credit union loan of €26k? Is this net of shares? What is the interest rate on the gross loan? What is the interest rate on the net loan?

If you are saving €250 a week, why are you not clearing your credit card quicker? Why just make minimum payments?

The lender might extend the term of the loan to free up some cash to pay off the credit card debt and credit union debt first. But don't clear off this debt if you will just build it up again.
 
We are not saving €250 week.
That's all we have to live on for food, bills, transport etc.

Credit union debt is net of shares.
We had larger debts from Celtic tiger years then borrowed in 2009 from cu to get house renovated. Got paycuts in 2010
It hadn't been done up at all since it was built 65 years ago.

We needed a kitchen/bathroom, double glazing to prepare for new baby etc. house was in absolute bits! We bought a very modest small home in Dublin.

I think we could pay extra €600 month for mortgage if we cleared all our debts which are costing us over €1400 per month.
We have both learned our lesson and want to get rid of our debts for good.

We have lived very frugally since 2009, servicing debts and paying childcare costs whilst our wages have gone done significantly since 2008!
At one stage we owed approx €29k in credit card debt and over €40 to cu we have made huge inroads to our debts and want to pay our debts.

Childcare costs and cu loans mean we can only pay minimum cc debt.
I have tax saver ticket for public transport.
Other half works shifts so requires a car.
No car loans thank god car is 14 years old and on the way out.
 
You should look to see if you can reorganise your debts first.

How much do you owe the CU? How much shares do you have? Will they set one against the other?

If the effective interest rate is less than the CC, will they lend you more money to clear the Credit Card?

You are paying €400 a month in capital off your mortgage. Will they allow you switch to interest only to free up money to pay down the credit card and credit union?

Might they lend you an extra €34k to clear those debts completely as they appear to be historic debts.

I think you need to document how the debts arose and how you have reduced them.
Then document how you have cut your expenditure.

Then ask the lender for a remortgage to clear your debts. I don't know if they will give it to you or not, but if you have €98k a year in income, you should be able to support €188k of mortgage debt

Brendan
 
I think we could pay extra €600 month for mortgage if we cleared all our debts which are costing us over €1400 per month.

We have both learned our lesson and want to get rid of our debts for good.

No car loans thank god car is 14 years old and on the way out.

Where are you getting the debt costing you €1400, looks closer to 2K to me.

Very expensive to borrow from the CU for house renovations, would have been better to have increased your mortgage.

You are based on your figures making inroads into you debt. Such a shame most of your salary is going to pay down debt and restricting your lifestyle.

If you sell for 230K - mortgage of 155K leves 75 K, less CU and credit cards, about 40K, but say 35K because of costs.

Then you want to borrow 250K on a salary of 98K. That's looks fine. How much would that cost? How much is the house? 250 + your 'profit' is 285, is that the figure you're looking at? Just less than 90%.

Any problems with your ICB report?

The 14 year old car is going to be a problem any any day now it's going to need replacing and zero savings.
 
Hi Bronte

Yes you are right our debt repayments are over €1800 per month.

If we sell and clear our loans and mortgage we should have at least €35k deposit for a new home.
Do you think bank would give us a mortgage or should we
Sell up pay off debts and rent for a while?

If we sell up and rent a house for €1200-1400 per month we could save approx €1200-1400 per month!

Partner is 44 . Are banks still giving mortgages up to age 70?

No probs with ICB always pay our debts/loans on time.

Our aim is to reduce our debts, and move into a larger home.
We don't want to stay in current home as it is too small for our needs.

Also our ages 44 and 41 if we wait another few years our capacity to borrow a mortgage will have reduced house prices could be much higher etc.
Now seems the right time to sell and get rid of our debts.

Has anybody else been successful in getting a mortgage to trade up and clear debts improve cash flow?

Or has anybody been in a similar situation and sold up, cleared all debts. rented and saved for a while before approaching bank for a mortgage?
 
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