Hi, I am trying to make some sense of my finances at the moment and am looking for some advice.
My PPR is with bank A, on a tracker mortgage at rate of 0.5% above ECB, currently at €800 a month and just about affordable.
Current estimated worth €350k, outstanding mortgage is €180k.
My investment property is with bank B, on a tracker mortgage at rate of 2.35% above ECB, currently at €880 a month on interest only, rented at €1000 a month, but the bank want me to pay full capital and interest repayment which will be €1650 a month ,which is not affordable ( even before the ECB starts going up).
Current estimated worth €185k, outstanding mortgage is €280k.
I am trying to get the term of the mortgage with bank B extended, which may work in the short/medium term, but I am worried that if the ECB puts up the ECB rate too much, the mortgage on the investment property will be once again unaffordable.
Options -
1. Sell investment property and have the negative equity as a personal loan for the remaining term of the mortgage - which I may or may not be able to afford to service?
2. Sell both properties and hopefully have enough equity in my PPR to cover the negative equity, so that I would be debt free?
3. Stick head in sand and hope it all works out in the end?
With option 3, I am worried that bank B could go down the repossession route, take the investment property, and then go for a judgement mortgage on my PPR, which with a wife and 2 kids to look after is a big worry. Can they do that?
Anyone any thoughts on ways to go?
My PPR is with bank A, on a tracker mortgage at rate of 0.5% above ECB, currently at €800 a month and just about affordable.
Current estimated worth €350k, outstanding mortgage is €180k.
My investment property is with bank B, on a tracker mortgage at rate of 2.35% above ECB, currently at €880 a month on interest only, rented at €1000 a month, but the bank want me to pay full capital and interest repayment which will be €1650 a month ,which is not affordable ( even before the ECB starts going up).
Current estimated worth €185k, outstanding mortgage is €280k.
I am trying to get the term of the mortgage with bank B extended, which may work in the short/medium term, but I am worried that if the ECB puts up the ECB rate too much, the mortgage on the investment property will be once again unaffordable.
Options -
1. Sell investment property and have the negative equity as a personal loan for the remaining term of the mortgage - which I may or may not be able to afford to service?
2. Sell both properties and hopefully have enough equity in my PPR to cover the negative equity, so that I would be debt free?
3. Stick head in sand and hope it all works out in the end?
With option 3, I am worried that bank B could go down the repossession route, take the investment property, and then go for a judgement mortgage on my PPR, which with a wife and 2 kids to look after is a big worry. Can they do that?
Anyone any thoughts on ways to go?