PasryQueen
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With €400k and (I think?) good salaries why not skip the first step and go directly to the "forever" home? How unstable will your salaries actually be in coming years?
Downsides? Do you really want to be in the property letting business? Read all the threads here about people getting out of it and the reasons why.
With €400k and (I think?) good salaries why not skip the first step and go directly to the "forever" home? How unstable will your salaries actually be in coming years?
Thanks Brendan and Clubman,Absolutely the correct strategy.
Buy your forever home now, before you change jobs as you will find it difficult to get a mortgage if you are on probation.
You save the hassle and costs involved in moving houses in 3/4 years.
When you have paid down the mortgage on your family home, you can then think about investing in property or equities or whatever. Come back here and do a moneymakeover and I would imagine that it will still be right to prioritise stuffing your pension.
Another big advantage of buying a home now with the €400k is that your LTV will be low and so the interest rate will be lower than it would be for a 90% mortgage.
It's not clear from your post whether you qualify as a FTB. If you do, there are some advantages in being a First Time Buyer , although I think that the only one applying to you now is that you will be able to borrow 4 times your income vs. 3 1/2 times your income as a second time buyer.
Brendan
Thanks Leo - the 100k deposit should be achievable (eapecially as we won’t have any rental mortgage over those years) and the salaries would support the loan (based on our previous earnings).Assuming you accept the downsides of becoming a landlord, and that regulatory changes in the mean time don't change your mind...
You'll be able to borrow a max of 80% for the forever home, taking the €500k example, that means you will need to save more than €100k in that time. Is that feasible and will salaries support borrowing €400k within loan to income limits? Don't underestimate the amount of money that you will spend furnishing, decorating, and maintaining the interim house.
Banks vary and their approach but it's likely that a percentage of future rental income would be factored into your affordability calculations. Again, there's a risk that might change in your timeframe.
That's not how tenancies work. If you have been there for more than 6 months you will have part IV tenancy rights.Our current lease is up later next year so we know we have to make a move and I don’t want to go back into the instability of another rental.
This is generally a terrible way to do it, having a mortgage free rental and then a lot of debt on your PPR mortgage. On paper it looks profitable but in reality you are carrying unnecessary debt that eats up the profit.We would rent out the first home and use the income to contribute to the mortgage repayments
You'll be able to borrow a max of 80% for the forever home,
Correct.Hi Leo
I think it's 90% for second time buyers under the revised Central Bank rules?
Brendan
400k would means test you against getting *anything* in terms of social welfare in the event of one or both of you not getting a job, so I would be inclined to buy something with it.Thanks Brendan and Clubman,
We were living overseas until recently and our savings are from selling our apartment before we moved back. Both of us are actually unemployed at the moment - I’m retraining for a new career, other half just lost his job (tech crunch ) - so not in a position to get any mortgage so the ‘forever home’ is not an option right now. Our current lease is up later next year so we know we have to make a move and I don’t want to go back into the instability of another rental.
I think using the first home for rental income down the line certainly needs more consideration, will go back to those threads and get a better grasp on the pro’s and cons.
Appreciate your comments
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