Buy Now or Buy Later

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SligoInvest

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Any advice appreciated.
I have a mortgage on an investment property and am due SSIA of c. €40,000 in February. The plan was to take this off the mortgage, in addition to the €500 my husband and I are currently paying into the SSIA. THis will save us a lot of interest and will pay off the property in 7/8 years.

We have however seen another investment property we like and are trying to decide whether to pay off the existing loan in 7/8 years or to combine the 2 loans over 20 years.

I think we should pay off the first morgage (with reducded interest) and then buy another in 7 years over a shorter term e.g. 10 years (thus saving more interest). I know that proprty will have risen but feel that the 2 savings in interest will more than offset this. My husband is more keen to buy the new property and merge the loans - I have looked at this and feel that the interest payment are excessive.

Any opinions????
 
Re: Buy Now our Buy Later

With current yields property investment in Ireland is all about leveraging. But with the current market uncertainty this looks like a very risky thing to gamble on. My advice is to take the money off your mortgage and don't buy the other property, then with a lower LTV on the property shop around for a cheap mortgage. If you do buy you will need circa 10% capital appreciation before your transaction costs are covered. The chances of this happening in the next two or three years are slim.
 
Re: Buy Now our Buy Later

SligoInvest said:
Any advice appreciated.
I have a mortgage on an investment property and am due SSIA of c. €40,000 in February. The plan was to take this off the mortgage, in addition to the €500 my husband and I are currently paying into the SSIA. THis will save us a lot of interest and will pay off the property in 7/8 years.

We have however seen another investment property we like and are trying to decide whether to pay off the existing loan in 7/8 years or to combine the 2 loans over 20 years.

I think we should pay off the first morgage (with reducded interest) and then buy another in 7 years over a shorter term e.g. 10 years (thus saving more interest). I know that proprty will have risen but feel that the 2 savings in interest will more than offset this. My husband is more keen to buy the new property and merge the loans - I have looked at this and feel that the interest payment are excessive.

Any opinions????
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It depends on where you would be looking to buy the investment property in my opinion so as you can weigh up the potential interest saved against a potential gain and/or rental income
 
Re: Buy Now our Buy Later

Thanks for that
We have decided to pay off our mortgage asap due to rsing interst rates and poor rental returns.
THanks
 
Re: Buy Now our Buy Later

SligoInvest said:
Thanks for that
We have decided to pay off our mortgage asap due to rsing interst rates and poor rental returns.
THanks
Click to expand...

A very wise decision IMHO

Yields are simply too low to consider property investment at the moment
 
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