speckybecky
Registered User
- Messages
- 3
I would really appreciate any advice anyone has for me on this subject.
My husband has a mortgage on our current home. It is a very small 2 bed in Dublin 12. It was bought for €330k, outstanding mortgage is €260k and the current value is €240k approx. We also invested €35k in the house to refurbish it . Our interest rate is very high (4.9%) meaning we our monthly mortgage repayments are €1650 approx.
The house is no longer suitable for our needs. We have sat it out for as long as we can but with 2 kids now, it has just become very impractical. The idea was to sell this house & ultimately buy a bigger house in the greater Dublin area/surrounding counties. We tried to sell but cannot achieve a high enough price to clear the mortgage so husband is not keen to sell at what he perceives to be a big loss (I agree). Now, we are thinking of renting it out. It would probably command €1400 a month, leaving us with a shortfall of over €200 in monthly repayments. Also, there will be the costs associated with renting (PAYE on rental income etc).
Given this, we are considering using the majority of our savings to switch our mortgage to a different bank (possibly KBC), we will need to contribute 25-30k to switch and get a lower rate - this should bring the mortgage repayments down to €1200 approx. a month. We feel that this is a good idea as it will bridge the monthly shortfall & seeing as we can't buy the bigger house until we sell this house, our savings will be working for us, instead of just sitting in the bank. We intend to rent in the GDA/surrounding counties.
However, I am worried it is risky to invest all our savings in the mortgage & am wondering if this a risky practice or does it make financial sense? I wonder if we would be better accepting the current offer on our house of €240k approx. and just cut our losses? When/(if!) we eventually sell the house & achieve the price we need to clear the mortgage, the houses in the GDA will have also increased meaning that whatever we saved in waiting will be gobbled up by the increased prices. That is assuming prices continue to rise!
Other information of relevance:
My husband also has a second property, also in negative equity (25k approx.) but this is rented out & there is no shortfall in rent/mortgage repayments (although associated PAYE/maintenance costs).
Both of us are in employment, two children in childcare, one approaching school going age so we need to put down roots somewhere asap.
I would really appreciate any objective opinions/financial advice!
Thank you in advance.
My husband has a mortgage on our current home. It is a very small 2 bed in Dublin 12. It was bought for €330k, outstanding mortgage is €260k and the current value is €240k approx. We also invested €35k in the house to refurbish it . Our interest rate is very high (4.9%) meaning we our monthly mortgage repayments are €1650 approx.
The house is no longer suitable for our needs. We have sat it out for as long as we can but with 2 kids now, it has just become very impractical. The idea was to sell this house & ultimately buy a bigger house in the greater Dublin area/surrounding counties. We tried to sell but cannot achieve a high enough price to clear the mortgage so husband is not keen to sell at what he perceives to be a big loss (I agree). Now, we are thinking of renting it out. It would probably command €1400 a month, leaving us with a shortfall of over €200 in monthly repayments. Also, there will be the costs associated with renting (PAYE on rental income etc).
Given this, we are considering using the majority of our savings to switch our mortgage to a different bank (possibly KBC), we will need to contribute 25-30k to switch and get a lower rate - this should bring the mortgage repayments down to €1200 approx. a month. We feel that this is a good idea as it will bridge the monthly shortfall & seeing as we can't buy the bigger house until we sell this house, our savings will be working for us, instead of just sitting in the bank. We intend to rent in the GDA/surrounding counties.
However, I am worried it is risky to invest all our savings in the mortgage & am wondering if this a risky practice or does it make financial sense? I wonder if we would be better accepting the current offer on our house of €240k approx. and just cut our losses? When/(if!) we eventually sell the house & achieve the price we need to clear the mortgage, the houses in the GDA will have also increased meaning that whatever we saved in waiting will be gobbled up by the increased prices. That is assuming prices continue to rise!
Other information of relevance:
My husband also has a second property, also in negative equity (25k approx.) but this is rented out & there is no shortfall in rent/mortgage repayments (although associated PAYE/maintenance costs).
Both of us are in employment, two children in childcare, one approaching school going age so we need to put down roots somewhere asap.
I would really appreciate any objective opinions/financial advice!
Thank you in advance.