As you are paying down capital of €7,500 a year, you will reduce the mortgage to €175,000 in about 7 years. So if prices remain the same, you will be out of negative equity in 7 years and you will have a very profitable investment.
I don't understand how if she's paid in all that money but the values of houses stay the same how it could be a profitable investment.
On your third point, would going into arrears affect my future borrowings, especially in the UK?
I think the idea of borrowing from family is crazy. Just making an even bigger mess.
I go with the maxim: neither a borrower nor lender be.
Maybe there's something here I don't understand!!! OP has indicated that monthly RI is 1,000 with potential to increase towards 1,200. Mortgage payments are 800pm. Direct property related expenses are likely to be low, so what is the issue? The net RI should currently meet the mortgage payment and this should increase if rent is raised. When she talks about "bills" are these external loans and if so why on earth should they be paid from RI?
My reading of it is that the rent is currently €1,000 pm (with scope to increase it to €1,200 pm) and that the outgoings attributable to the property are currently €1,300 pm.
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