Getting another mortgage as a single person advice

Karker14

Registered User
Messages
5
Hi,

I am in need of some guidance as I am not sure what to do about my situation.

I bought a house in Kildare 8 years ago for 280K (3 bed end of terrace house).
I've 240K left on the mortgage and I would think its got a sale value of approx 180 but possibly more now.
I rented it out in 2010 as the commute to Dublin was difficult with the hours I worked. (all the tax etc is declared)
I rented a property which I have recently moved out of into a lower price apartment.

I really want to buy an apartment in Dublin (I'm single & 40 so no need for a house - and I'm happier in apartments).

I got mortgage approval earlier this year for 250k.

So my options are:
1) Keeping renting the house in Kildare & buy in Dublin
2) Sell Kildare and carryover the negative equity
3) stay as I am but rental prices are increasing in dublin and my current apt is a short term let

I also have 50k in savings.

Which would be the best option for me?
thank you
 
You have an existing mortgage of 240K and have been approved a new mortgage of 250K!! Even with some rental income from the Kildare property you must have a phenominally high salary to support P&I repayments on both loans. Did you disclose the existing mortgage in the application for the new one?
Very difficult to give any advice on the information disclosed. We would need a full financial makeover to be completed in order to offer appropriate advice.
 
Agree with 44b that you need to provide much more information

1) Your salary
2) Any other assets
2a) Do you have a pension scheme?
3) Who is the lender on your existing mortgage?
4) What is the rate - tracker or SVR.
5) What is the term?
6) What is your most likely final destination? Dublin or Kildare?

The fact that you have been approved for a mortgage does not mean that it's a good idea to take one out.

Brendan
 
1) Your salary
I'm on 85K basic
2) Any other assets
No
2a) Do you have a pension scheme?
Yes - AVCs plus company pay 650 per month into it
3) Who is the lender on your existing mortgage?
Bank of Ireland
4) What is the rate - tracker or SVR.
Variable
5) What is the term?
35 years
6) What is your most likely final destination? Dublin or Kildare?
Dublin

You made a good point about two mortgages.
It was Bank Of Ireland that approved me.
I'll have to call them again.
 
Current position

|Current position|after buying house
Property value|€180k|€430k
Net mortgage|€€190k|€440k

Your net borrowings will be about 5 or 6 times your salary.

Bank of Ireland will give you a negative equity mortgage, which would be far more comfortable.

Look it another way. Let's say you had a mortgage of €260k on a home in which you were comfortable worth €250k, would you buy an investment property for €180k with a mortgage of €180k?

You are probably best off selling your current home and buying a new one. Then concentrate on getting rid of the negative equity.

Brendan
 
Could you get an up-to-date valuation on the Kildare property done without spooking the tenant? That will give you a clearer picture of where you stand with negative equity.

Ask yourself if being a landlord with an investment property is something you want to be in the long-term or has it just been an evil necessity?

Then if it's just been a necessity ask yourself how you will best extricate yourself from that situation.

You could do as has been suggested - sell & take the negative equity with you to a new property in Dublin. If you buy the right property in Dublin that negative equity may be reduced much more quickly than it will be in Kildare by rises in property value.

You could wait for a year, save as much money as you can over the year & see where you are then with regards to the amount of negative equity on the Kildare property. You'd have saved money to pay down that mortgage or as a deposit in Dublin.

Unless you really want to have an investment property, make your life as simple as possible & have one mortgage on the property you really want to live in. If that's your decision, then the only other question is one of timing - when do you sell the Kildare property & that becomes an issue of property price speculation & how quickly you want the simpler life.
 
A further consideration...

If you are comfortable with a mortgage of €430k, would you consider selling your investment property and buying a more expensive home? Obviously if a €250k apartment meets all your needs, fair enough. But maybe a €300k apartment would be closer to where you want to live or have an extra room or whatever.

Brendan
 
Don't see why you should sell the Kildare property.

What is the rent and the mortgage repayments. Does the rent cover all costs including taxes?
 
Thanks for all the responses.
I was a little panicked last night thinking about the big mortgage but I need to revisit the bank.

Bronte, the rent isn't covering the mortgage repayments unfortunately.
I love the house but the location just doesn't suit.
I'm single and an apartment just makes more sense for me.

Its in the Naas area and Kerry Group are building their big Technology and Innovation centre about 15 min walk from the house so I expect the value of the property will go up.

Estate Agents asked me to call again in June and I may do a valuation.
I just want to get this sorted and I suspect my negative equity is probably less than I anticipate.
I'm using the money I'm saving in this temp arrangement to knock more off my current mortgage.
 
Ok so it makes sense to offload it.

What type of apartment are you looking for, how many bedrooms and is it a decent size. Good location?

How much would the mortgage on it costs, and how much rent could it achieve?
 
I'd like a 2 bed at least in a good location. Prices are going up fast. I thought apt prices were not rising as fast as houses.
I know I'm not the only one but buying that house was a bad idea so I'm a bit gun shy now about moving too fast and make another mistake.
 
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