little help! - loans loans.....

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irelandproperty

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Hi hoping someone can give me some advice!

At the minute living in Sligo, have a 2 bed house which purchased for 120k a year ago. We have gutted the place and are nearly done with the renovations. Similar houses have been selling for about 170k in the last few weeks. Its close to the IT and town centre.

Problem is my partners father isn’t well so we want to finish the house, sell or rent it out and move back home to Galway.

At present we both have jobs – earning 300/350 each per week; our outgoing are below :

Mortgage (EBS 115,200 over 30 yrs) 434 p/m
Loan (Credit Union 10150) 340 p/m
Loan (Ulster bank 6500) 179 p/m
Car Insurance (Quinn Direct) 165 p/m
Grocery 500
Car Running costs 80
Other 200
Total : 1898

Bal (1200+1400=2600-1898=702)

The remainder seems to disappear! – Between birthdays, presents, travelling each w/end back to Galway etc. and other living expenses.

Now that we want to sell/rent out the property we are in a bit of bother. To complete all the work on it would cost about 7,000 – this would include 1 month’s wages for myself (1200) – this would save us about 4k in labour costs.

I have a job lined up in Galway that starts in November so the timing would be ok. My partner also has a job in Galway starting in November/December – both of us would be on better money in these jobs.

1)
We have no idea how to go about raising the 7k? Should we/would we be able to get another loan? We have never missed any payments on any bills/DD etc., but have gone over our 320euro overdraft with the Ulster bank on a few occasions? -Does this count against you? And we gather it wouldnt help that I am leaving a job for a month ?

Any help would be VERY much appreciated. It’s difficult, trying to get our head around these when there is so much going on.

2)
Also would you think we should sell the property and clear our loans or rent it out for a time till the loans are paid off more and then sell? (when we move to Galway we will be moving back with our parents so there is no rent to pay )

Thanks
 
> The remainder seems to disappear! – Between birthdays, presents, travelling each w/end back to Galway etc. and other living expenses.

First things first - you need to find out where the money is coming from and going to by doing recording your budget for a period of time. This will help you ascertain where potential savings may be made:



> Mortgage (EBS 115,200 over 30 yrs) 434 p/m

In spite of their mutual status EBS are not the most competitive lender in the past few years so you may be able to make significant long term savings by switching to a more competitive lender/rate:

www.askaboutmoney.com/clu...#MORTGAGES

You don't list mortgage protection life assurance separately but presumably you are paying this? Again you may be able to get a better deal by shopping around:



> Loan (Credit Union 10150) 340 p/m
> Loan (Ulster bank 6500) 179 p/m

What are the terms and rates (APRs) on these loans?

> Also would you think we should sell the property and clear our loans or rent it out for a time till the loans are paid off more and then sell?

One thing to bear in mind is that if you rent out a former principal private residence within five years of purchase then you will be subject to a clawback of stamp duty as per this link which will further impact your short/medium term cashflow situation:



In addition if you sell within 12 months of moving elsewhere then any gain is exempt from CGT whereas if the property becomes a rental/investment property then CGT will be levied on some part of any eventual resale gain. In addition while renting you will need to take care of the relevant management and tax issues:



No offence intended but if you are struggling with you personal finances/cashflow right now then trying to manage a rental property and all of the (tax and other) issues that go with the territory may add to your burdens.

You need to carefully consider why you may want to get into the rental property business and decide if this is the most appropriate investment strategy for your overall personal/financial situation.

If in doubt about anything here get independent, professional advice.
 
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