I want to buy a property, how can I do it?

[Fatphrog]

I would appreciate some opinions on my situation.

My OH and I own a 3 bed, now worth under 100k going by recent sales in the area. It's in a nice enough estate and would rent out readily enough for maybe 600pcm.
The mortgage is a tracker with BOI, ECB + 1%.
Currently this means €1200 pcm repayment with 24 years to go
The balance is €275,000.
We have no arrears.

We also own a property in the UK worth £160000.
Outstanding mortgage £90k.
Repayments £750 pcm with 11 years remaining with a tracker at BOE +1%.
No arrears.
The property is let and the rent covers the interest, fees and tax etc. and some of the repayment leaving an overall shortfall of £500.

I earn €3600 pcm and my OH earns €2700.
Both jobs are secure and long term.
We have two children and childcare costs are €1000 cpm.
We have savings of €50,000.


Here is the (first world) problem:

I want to buy a property on the market for €200k. It is a 'doer upper' and we'd not want to move in right away.
I don't want to sell our present house at the bottom (hopefully) of the market and I would be happy to let it out long term once the new place is more livable. The same goes for the UK property, I'd rather not have to sell it right now.
I approached the lender of the UK property for equity release but their policy is not to lend additional money on rental property. I have not approached BOI or anyone else yet.

Any ideas on how I can buy this property?

 

[Bronte]

How would you be able to fund the repairs to the new property? How would you repay a mortgage on the new property if you are not living there and not receiving any rent?

 

[Brendan Burgess]

You have around €280k in property and around €330k in net borrowing.

If you were to buy this property, you would have €480k in property and €550k in net borroweing.

You should not buy the other property without disposing of one or both of the others.

I would strongly suggest selling the UK property. You will then have a cash pile of around €130k.

You might be able to use this to get a mortgage of €70k on the €200k property.

Or you might be able to use it to leverage a deal from BoI to sell and pay off the tracker early.

BoI might well give you a trade-up mortgage as they would be getting rid of a cheap tracker. But you would still need to sell the UK property.

If you think that the market is at the bottom now, you don't lose out by selling one property for €100k and buying another for €200k also at the bottom. If the market falls further, you lose a lot by holding onto both properties. As you already in negative equity, you shouldn't expose yourself to further losses.