Newly married couple.

Discussion in 'Money makeover' started by Gushering, Jun 15, 2017.

  1. Gushering

    Gushering New Member

    Monthly take-home pay €3800/€3800

    Type of employment: e.g. Civil Servant, self-employed (I'm private sector – spouse is HSE/public sector)

    In general are you:

    (a) spending more than you earn, or

    (b) saving?

    We are now probably saving about €3k per month between us after bills are paid.

    Rough estimate of value of home €475-500k

    Amount outstanding on your mortgage: €225k

    What interest rate are you paying? 3.6% BOI fixed rate (due to expire soon) (it was never a tracker mortgage).

    Other borrowings – car loans/personal loans etc €0

    Do you pay off your full credit card balance each month? Yes.

    If not, what is the balance on your credit card?

    Savings and investments: 25k in cash.

    Do you have a pension scheme? No

    Do you own any investment or other property? Spouse owns an investment property.

    Ages of children: n/a

    Life insurance: 0 (just for the mortgage)

    What specific question do you have or what issues are of concern to you?

    We are newly married and for the first time in several years I am making good money and have cash to save. I owned our apartment prior to marriage which I bought just after the crash and it has appreciated very nicely in equity since. However the term is quite long (25 years to go) on it and I am proposing to over-pay the mortgage by about by 100% once the fixed rate expires shortly to save on the mortgage interest payments and build up even more equity.

    My spouse has an investment property which arose from her parents doing a little property development with some mews houses during the boom years and then putting one of the units (and mortgage associated with same!) into her name. It has been on an interest-only tracker for many years but now requires capital repayments to be made for next 12 years or so. The rent (€1900 per month) covers almost all of the monthly mortgage repayment but when the income tax bill on this property is factored in, I reckon it will costs us quite a lot of cash each year to maintain going forward. Her investment property is probably still in a little bit of negative equity but has potential to break even and maybe increase in value over the coming years (though I suspect not by a huge amount). I'm unsure whether we should just bite the bullet and sell it asap or keep absorbing the cost of holding on it as an investment. It seems like a big draw on cash flow with limited potential to grow further in value to me.

    We plan to start a family in next couple of years and will need to buy a proper sized family home. Neither of our two properties would be the right size for this purpose and realistically I think any bank will require us to sell the two properties and clear the associated mortgages we have before we can get a new one, even if we have a decent deposit built up from the sale of our principal residence.