EldridgeCleaver
Registered User
- Messages
- 6
Age:
43
Spouse’s/Partner's age:
37
Annual gross income from employment or profession:
€165,000
Annual gross income spouse:
0
Type of employment:
Private sector employee
Expenditure pattern:
We are both generally 'spenders'
Mortgage on home
€388,650 outstanding. Taken out in early 2007. Maturity Date – Aug 2042
Rough estimate of value of home
€280,000
Mortgage provider:
PTSB
Type of mortgage:
Tracker
Interest rate
ECB+2.25% - currently paying 2.3%
Equity Release Mortgage (secured on Investment Property)
€80,000. Taken out in early 2007. On interest-only since Day 1. Maturity Date – Feb 2029
Mortgage provider:
PTSB
Type of mortgage:
Tracker
Interest rate
ECB+1.35%
Do you own any investment or other property?
Yes.
Rough estimate of value of investment property
€180,000
Mortgage on Investment Property
€178,380. On interest only since 2009. Taken out in 2002. Maturity Date - Aug 2028.
Mortgage provider:
PTSB
Type of mortgage:
Standard Variable Rate
Interest rate
4.15%
Rental Income
€1050
Other borrowings – car loans/personal loans etc
Credit card 1 - €4,800
Credit card 2 - €2,800
Do you pay off your full credit card balance each month?
No – minimum payments but plan to clear it in the next 3/4 months.
Savings and investments:
0
Do you have a pension scheme?
I previously worked in the public sector for about 7 years so there will be a defined benefit pension of some small amount from that when I retire. I also have pension bonds from previous occupations. I think the total value of the bonds is about €28,000. I have a decent pension now and between my contributions and my employer’s contributions I put about €3,000 in per month.
Ages of children:
11, 8, 3
Life insurance:
Yes but only covers my home and the equity release mortgage in the event of either me or my wife dying. I have no insurance on the investment mortgage.
What specific question do you have or what issues are of concern to you?
We made a very bad decision back in 2007 to move to a bigger home because our family was growing. We put our house on the market and bought a bigger house. We got the mortgage and an equity release to cover the downpayment and moved to secure the new house before our own was sold. We were in a bidding war and we really liked the house. I suppose our appetite for risk was different then.
Anyway, the market tanked and we could not sell our old house so we rented it out for what we hoped would be a short term. Any subsequent offers we received on the house after that were low so we decided to keep it and rent it long term.
We struggled really hard for a number of years. We were both working but the cost of childcare, mortgages etc took everything we had and we went into arrears. Nothing that big but enough to keep you awake at night. About 18 months ago I got the job of my dreams and my wife, who was not so happy at work, wanted to stay at home with the kids for a couple of years. Everything has been good since and we have cleared the arrears on our mortgage.
My next plan is to clear the credit cards as quickly as possible and I will do that in the next few months. After that, I am not sure what to tackle next. I considered tackling the small mortgage of 80,000 but I am paying the lowest interest rate on this. I considered switching the investment mortgage back to principal and interest but I am now thinking that I should just overpay the big mortgage as I can write off the interest on the investment mortgage against the rental income so I do not see the sense in reducing that first. I have also thought about reducing the overall debt burden by selling the investment property but the rental income covers the payments on both the investment mortgage and the equity release mortgage so I would realise a loss on the sale and would still have the equity release mortgage to deal with.I am concerned though that if interest rates start to climb again I will be in trouble.
I would appreciate any thoughts you have on the best approach or indeed any alternative proposals you may have. My income has gone up considerably but we have learned to live frugally over the past few years so I really want to tackle the debt mountain now rather than spending the additional income unwisely.
Thanks in advance
Eldridge
43
Spouse’s/Partner's age:
37
Annual gross income from employment or profession:
€165,000
Annual gross income spouse:
0
Type of employment:
Private sector employee
Expenditure pattern:
We are both generally 'spenders'
Mortgage on home
€388,650 outstanding. Taken out in early 2007. Maturity Date – Aug 2042
Rough estimate of value of home
€280,000
Mortgage provider:
PTSB
Type of mortgage:
Tracker
Interest rate
ECB+2.25% - currently paying 2.3%
Equity Release Mortgage (secured on Investment Property)
€80,000. Taken out in early 2007. On interest-only since Day 1. Maturity Date – Feb 2029
Mortgage provider:
PTSB
Type of mortgage:
Tracker
Interest rate
ECB+1.35%
Do you own any investment or other property?
Yes.
Rough estimate of value of investment property
€180,000
Mortgage on Investment Property
€178,380. On interest only since 2009. Taken out in 2002. Maturity Date - Aug 2028.
Mortgage provider:
PTSB
Type of mortgage:
Standard Variable Rate
Interest rate
4.15%
Rental Income
€1050
Other borrowings – car loans/personal loans etc
Credit card 1 - €4,800
Credit card 2 - €2,800
Do you pay off your full credit card balance each month?
No – minimum payments but plan to clear it in the next 3/4 months.
Savings and investments:
0
Do you have a pension scheme?
I previously worked in the public sector for about 7 years so there will be a defined benefit pension of some small amount from that when I retire. I also have pension bonds from previous occupations. I think the total value of the bonds is about €28,000. I have a decent pension now and between my contributions and my employer’s contributions I put about €3,000 in per month.
Ages of children:
11, 8, 3
Life insurance:
Yes but only covers my home and the equity release mortgage in the event of either me or my wife dying. I have no insurance on the investment mortgage.
What specific question do you have or what issues are of concern to you?
We made a very bad decision back in 2007 to move to a bigger home because our family was growing. We put our house on the market and bought a bigger house. We got the mortgage and an equity release to cover the downpayment and moved to secure the new house before our own was sold. We were in a bidding war and we really liked the house. I suppose our appetite for risk was different then.
Anyway, the market tanked and we could not sell our old house so we rented it out for what we hoped would be a short term. Any subsequent offers we received on the house after that were low so we decided to keep it and rent it long term.
We struggled really hard for a number of years. We were both working but the cost of childcare, mortgages etc took everything we had and we went into arrears. Nothing that big but enough to keep you awake at night. About 18 months ago I got the job of my dreams and my wife, who was not so happy at work, wanted to stay at home with the kids for a couple of years. Everything has been good since and we have cleared the arrears on our mortgage.
My next plan is to clear the credit cards as quickly as possible and I will do that in the next few months. After that, I am not sure what to tackle next. I considered tackling the small mortgage of 80,000 but I am paying the lowest interest rate on this. I considered switching the investment mortgage back to principal and interest but I am now thinking that I should just overpay the big mortgage as I can write off the interest on the investment mortgage against the rental income so I do not see the sense in reducing that first. I have also thought about reducing the overall debt burden by selling the investment property but the rental income covers the payments on both the investment mortgage and the equity release mortgage so I would realise a loss on the sale and would still have the equity release mortgage to deal with.I am concerned though that if interest rates start to climb again I will be in trouble.
I would appreciate any thoughts you have on the best approach or indeed any alternative proposals you may have. My income has gone up considerably but we have learned to live frugally over the past few years so I really want to tackle the debt mountain now rather than spending the additional income unwisely.
Thanks in advance
Eldridge