Age: 34
Spouse’s/Partner's age: Single.
Annual gross income from employment or profession: E55,000
Annual gross income spouse: N/A
Type of employment: Private sector - blue-chip company (I'm as secure as one can be in private sector)
Expenditure pattern:
Now - spending much less than my earnings
Rough estimate of value of home: E225,000
Mortgage on home: E210,000
Mortgage provider: NIB
Type of mortgage: Tracker
Interest rate: ECB +.79%
Other borrowings – car loans/personal loans etc
Personal Loans (Bank) 24,000
Overdraft 6,000
Loan from family member 60,000
Do you pay off your full credit card balance each month?
Yes
Savings: None.
Do you have a pension scheme?
Yes, my company provide a defined benefit pension on my behalf.
I am not required to pay any monthly contribution
Do you own any investment or other property?
Yes I have two (both in Spain).
Property 1 - Approx value €140,000 (realstic value - I feel)
Mortgage none
Monthly rental income €550
Property 2 - Approx. value 180,000 (realstic value - I feel)
Mortgage outstanding - 135,000
Monthly rental €530
Ages of children:
None.
Life insurance:
Yes.
Additional background information
Evidently, the main issue relates to the large amounts of personal loans & overdrafts I have. I "acquired" these loans while funding the purchase costs and renovation of my investment properties (mainly the second one).
Both properties were in a desperate state of repair when purchased. The business case for buying them was based on the foreign bank reimburse my costs (i.e. provide an equity release to allow me cancel my personal borrowings) once the renovations were completed. However they never did due to the credit crisis.
As a result I now have to pay the personal loans, over a five year period.
The bank loans cost approx. 700 per month. (3.5 years remain)
Currently I pay €450 pm on the loan from the family member - I intend to up this repayment once the term loans are paid.
I have really reigned in my monthly spending to meet these payments. I manage to live on approx €800 per month ( including domestic bills, but not including mortgage payments). I've maximized my monthly income; by renting my spare room & engaging in extra work - this income is reflected in the income stated above.
Assuming no major changes to income and expenditure patterns :
By the end of 2010 - I will have paid off my overdraft & 10K of my family loan (have to pay this amt. in 2010).
By 2011 - I will have paid off my bank loans and another 10K of my family loan (have to pay this amt. in 2011)..
In the remaining years I plan to focus on paying back the remainder of the family loans - no major pressure on the timescales for this repayment.
The rental income from my investment properties is used to pay the mortgage and the surplus is currently being used to do some necessary upgrades to the properties (rewiring, improved plumbing etc.)
Once these are completed I will divert any surplus rental into debt repayment (obviously focusing on the most expensive loans initially).
What specific question do you have or what issues are of concern to you?
My reason for buying the investment properties was to fund early retirement / expand my options in later life / or use the sale of them to buy my dream house here in Ireland.
I can't have kids so feel I need to provide alot of cushion for my future.
While the price of my properties has taken a hit, I'm not too worried about this as I'm happy to ride the market long term.
The rental income on my investment properties is pretty steady (both are tenanted with long term tenants and both apts are in high demand due to their location, also the agent is a trustworthy family friend who puts alot of effort into maintaining them).
Ultimately my questions are:
- Am I crazy to maintain both investment properties?
- Should I focus more (or less) on debt repayment - currently all spare money is being diverted into this.
- Is the order in which I plan to repay my loans correct i.e. am I focusing on the right loans?
- Overall I'm pretty happy with my standard of living & lifestyle - even though things are tight at the moment. Are my priorities right? (more of a lifestyle question than money one).
- Any other thoughts on my financial situation - once I repay the loans (tidy up the mess) what should I be looking to do - reduce my mortgages - diversify my investments etc.
Thanks in advance for all help / advice
Spouse’s/Partner's age: Single.
Annual gross income from employment or profession: E55,000
Annual gross income spouse: N/A
Type of employment: Private sector - blue-chip company (I'm as secure as one can be in private sector)
Expenditure pattern:
Now - spending much less than my earnings
Rough estimate of value of home: E225,000
Mortgage on home: E210,000
Mortgage provider: NIB
Type of mortgage: Tracker
Interest rate: ECB +.79%
Other borrowings – car loans/personal loans etc
Personal Loans (Bank) 24,000
Overdraft 6,000
Loan from family member 60,000
Do you pay off your full credit card balance each month?
Yes
Savings: None.
Do you have a pension scheme?
Yes, my company provide a defined benefit pension on my behalf.
I am not required to pay any monthly contribution
Do you own any investment or other property?
Yes I have two (both in Spain).
Property 1 - Approx value €140,000 (realstic value - I feel)
Mortgage none
Monthly rental income €550
Property 2 - Approx. value 180,000 (realstic value - I feel)
Mortgage outstanding - 135,000
Monthly rental €530
Ages of children:
None.
Life insurance:
Yes.
Additional background information
Evidently, the main issue relates to the large amounts of personal loans & overdrafts I have. I "acquired" these loans while funding the purchase costs and renovation of my investment properties (mainly the second one).
Both properties were in a desperate state of repair when purchased. The business case for buying them was based on the foreign bank reimburse my costs (i.e. provide an equity release to allow me cancel my personal borrowings) once the renovations were completed. However they never did due to the credit crisis.
As a result I now have to pay the personal loans, over a five year period.
The bank loans cost approx. 700 per month. (3.5 years remain)
Currently I pay €450 pm on the loan from the family member - I intend to up this repayment once the term loans are paid.
I have really reigned in my monthly spending to meet these payments. I manage to live on approx €800 per month ( including domestic bills, but not including mortgage payments). I've maximized my monthly income; by renting my spare room & engaging in extra work - this income is reflected in the income stated above.
Assuming no major changes to income and expenditure patterns :
By the end of 2010 - I will have paid off my overdraft & 10K of my family loan (have to pay this amt. in 2010).
By 2011 - I will have paid off my bank loans and another 10K of my family loan (have to pay this amt. in 2011)..
In the remaining years I plan to focus on paying back the remainder of the family loans - no major pressure on the timescales for this repayment.
The rental income from my investment properties is used to pay the mortgage and the surplus is currently being used to do some necessary upgrades to the properties (rewiring, improved plumbing etc.)
Once these are completed I will divert any surplus rental into debt repayment (obviously focusing on the most expensive loans initially).
What specific question do you have or what issues are of concern to you?
My reason for buying the investment properties was to fund early retirement / expand my options in later life / or use the sale of them to buy my dream house here in Ireland.
I can't have kids so feel I need to provide alot of cushion for my future.
While the price of my properties has taken a hit, I'm not too worried about this as I'm happy to ride the market long term.
The rental income on my investment properties is pretty steady (both are tenanted with long term tenants and both apts are in high demand due to their location, also the agent is a trustworthy family friend who puts alot of effort into maintaining them).
Ultimately my questions are:
- Am I crazy to maintain both investment properties?
- Should I focus more (or less) on debt repayment - currently all spare money is being diverted into this.
- Is the order in which I plan to repay my loans correct i.e. am I focusing on the right loans?
- Overall I'm pretty happy with my standard of living & lifestyle - even though things are tight at the moment. Are my priorities right? (more of a lifestyle question than money one).
- Any other thoughts on my financial situation - once I repay the loans (tidy up the mess) what should I be looking to do - reduce my mortgages - diversify my investments etc.
Thanks in advance for all help / advice
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