Mid 30's what to do next

[Chips15]

Personal details
Age: 36
Other half: 33
Number and age of children: 1 year old (possibly having more soon)

Income and expenditure
Annual gross income from employment or profession: €97,000 + 12,000 car allowance + 80,000 RSU which I cash out yearly
Annual gross income of spouse: €55,000
Monthly take-home pay: €7,600
Type of employment: Private
In general, we are saving.

Summary of Assets and Liabilities
Family home worth €330k with a €125k mortgage
Cash €65k
Pension: Me 110,000 (I avc over 1,000 per month) OH: 25,000

Family home mortgage information
Haven 3.15% - I know I should change to a lower rate but this keeps me focused on overpaying it.

Other borrowings – car loans/personal loans etc - none

Buy to let properties
None

Other savings and investments
I have 75,000 in investments

Other information which might be relevant: None


What specific question do you have or what issues are of concern to you?
Will need to upscale house soon if we have another child. Should we look at over paying the mortgage or keeping cash on hand as a deposit? My thinking is that if we upscale it's easier to buy a house with a 20% deposit than be in a chain which can lengthen the process?

Any recommendations?

 

[Clamball]

75 + 65 + (330-125) = 345

I think just move, I was going to suggest stopping the AVC funding for a while to maximise savings, but with 345K in assets to purchase a new home you can afford up to €500K mortgage. Even if you save a further €2k a month in the next 12 months it won’t make that much difference. Time your move while your spouse is still working, she may decide to stop work after baby no 2, it would probably be easier to get mortgage approval with you both working.

 

[Brendan Burgess]

Hi Chips

You are right. If you can trade up without being in a chain, that is the least stress-free way to do it.

So, don't overpay your mortgage. I also think you should suspend AVCs for the moment.

How much actual liquid assets do you have?

Investments: €75k
Cash €65k
Available RSU?
: €140k

With combined incomes of €150k, you should be able to borrow €525k total - less existing €125k = €400k comfortably. I would imagine that the lenders would give you more if you wanted it particularly if you are planning to sell your existing home afterwards.

Is €540k enough to buy the house you want?

If you sell your own house first, you would have
Cash €140k
Equity : €200k
Borrowing: €525k
Total: €850k

So it really depends on what your plan is?

You have enough to trade up to your forever home, so it's better to do that, than to jump up a few rungs on the ladder, with a view to trading up again in a few years.

Brendan

 

[Brendan Burgess]

Haven 3.15% - I know I should change to a lower rate but this keeps me focused on overpaying it.

This makes no sense.

If you switch to a lower rate you can overpay it as well.

It looks as if you are on the >80% LTV variable rate.
You can switch to their <50% variable rate of 2.75% and save .4% of €125k or €500 a year.

You could fix for three years at 2.35% but you could face an early termination fee if you do sell your home.

Brendan