Am i bonkers looking for a second mortgage?

[Mad Bad Babs]

Hi all
Im new to this forum but find it extremly useful for genuine honest opinions so would really appreciate any thoughts feedback you could give me on this one.

I would dearly love to trade up as soon as possible. just had baby and longing to move out the country.

My finiacial situation at the moment is:
I'm earning 42k gross. (Usually earn 50k gross but was on mat leave last year so wages were on basic as opposed to premiums i usually get for nights and weekends).
Husband earns 27K gross. Have a mortgage remaining of €149k. Savings €22k. Mother in law willing to give gift for stamp duty and remaining deposit needed.
I've got my house on market at €195k) but realistically looking at making €180k tops for it i'd say. (Paid 183K 5 years ago and at least 12k gone into it. v. high quality spec, decking, ect so selling at a loss but not in negative equity yet so i guess it's not too bad.

House we want to buy is on the market for €239K. (18 months ago they were €337K). There are 3 houses left on development so figure there maybe room for negociation on this one with builder.

I met with bank today (PTSB)and based on our currrents earning we qualify for €266k mortgage. so am ok that end. We need to have 15% deposit as we are trading up.

Obviously if i sell house we are in grand position but i am not very optimistic that we will sell. Its on market 5 weeks and only one miserable viewing!
I'm so desperate to move im really tempted to rent out my house and keep as a long term 'investment'? scrape together the deposit plus Stamp duty with savings and gift from rich granny!

Obviously the bank are less enthusiastic about this option although they didnt rule it out completely. From what i can gather if i can get guaranteed prove of rental income with tenants contracts signed ect this could help me get second mortgage.

I'm fully aware of the pitfalls of renting out my first home and realise it comes with ALOT of hassle, loss of TRS, income tax ect ect.

I suppose i am gauled to sell my house at low price even if market still drops and as i said im not very optimistic i'ill sell at all the way things are going.
EA for builders will take a 5k fully refundable booking deposit and no contracts signed until we sell our own.

If I rented out my own house, and got second mortgage i feel we would be in a better position to negociate to knock down at least another 10k off asking price.

What do ye think? any feedback greatly appreciated!

 

[plendoza]

Take a deep breath and hold your horses. No need to be rushing things. You have built up a head of steam to move out I can see from reading your post, so the best thing to do is move out and rent a place out the country or whever you wish to live. This will release you from the emotional pressure of wanting to buy quickly which could cost you dearly.

The reason you are not selling is because your price is too high plain and simple. Take another 20k/30k off the price and see what happens.


You can recoup this loss by only offering to pay 20k/30k less on your new house - the developer/EA selling the house to you will bite anyone's arm off to shift the house. Remember the EA does not get bread until he makes a sale. You have the advantage here. Tell him you got 20k less for your house than you were expecting or whatever the figure is when you sell it, so he must do likewise

Nothing is stopping you from moving out and renting a place in the country and try renting your own place if you do not want to sell it. If you don't get any tenants then maybe its time to sell.

In any case it may be advisable to rent a place out the country first if you really want to move out and give things a bit more time, as the last thing you want to do is pay too much for a new place

Best of luck

 

[huskerdu]

I agree with Plendoza advice.
You really want to move location. If this is important to your quality of life, then of course you should go for this. However, you have decided that the only way to do this is to buy a house in your new location immediately. You need to realise that this may not be the best solution.

The country is full of houses for sale. If you rent in your new location for 6 months or a year, you may find an even better house at a better price than the one you are currently looking for and when living there, you will have a much better idea of exactly where you want to live in the locality.

 

[dereko1969]

are you sure you'll be liable for stamp duty on the new house? as it's a new house i thought it would have to be bigger than 125msq?

 

[Robin Banks]

Hi all
I've got my house on market at €195k) but realistically looking at making €180k tops for it i'd say.

Eh so advertise it at 180k then.

You think overpricing your property in the current market is a good idea?

Dear oh dear, who is advising you.. Can they spell commission? Ask them if they can spell commission.

 

[Mad Bad Babs]

Thanks to all who responded for much needed advice.
Plendoza: I agree i think i am just running away with myself at the moment. i need to calm down and take a breather. i guess i am so anxious to move i can't think clearly.

Robin Banks: similar houses on the estate are being marketed at €200-€205K. so just went with EA's advice to go under theirs and see what happens... i'm a complete notive here so just went with their advice.
Totally agree with you though that i need to drop the price. I spoke to a couple more EA's over the weekend and although they said my property is worth in region of €190K, anybody making offers on property now are going in nearly 10% below asking offers anyway..so if i market it at €180K i might not get offers over €165K?
Dereko1969: the property i am interested in is 1,625 sq ft so im nearly sure i'm liable for Stamp duty then but i'd love if i was wrong!!
I spoke with EBS today re: second mortgage. They were extremely helpful and very positive re: giving me a second mortgage provided i'd have proof on rental income ect on my first property. So I've alot to think about.
Thanks again for all your advice. Very much appreciated.
I'ill keep you posted on any outcomes.