So unless we can get a 4.5 income to value exemption, this is not possible ?To me, it looks like you'd need to sell the apartment.
Mortgage borrowing (no exemptions):
3.5 x 117k = 409.5k
409.5 - 230 (outstanding mortgage) = 179.5
179.5 + 110 (current savings) = 289.5k
You may qualify for an exemption. Worth running it by a mortgage broker for sure.
BOI and KBC will allow a certain amount for rental income, perhaps at about 50% to cover the risk of non-payment or other issues.So unless we can get a 4.5 income to value exemption, this is not possible ?
These numbers don't stack up. On a combined income of €117k, you are taking home approx €6850/month without any pension or health BIK, plus €420/month for children's allowance. Your car loan, mortgage, childcare and savings total €5770 so a family of 5 are surviving on €1500 a month for absolutely everything else?? You may be moving €3k into a savings account but it is not real savings. Even if you have significant bonuses on top of the €117k, it is still modest for a family of 5 and doesn't align with having a car loan of €745Avg monthly saving : 3K
combined annual revenue : 117K both in permanent full time jobs.
3 dependants : avg 600 childcare/month
Car loan : 745€/month
That's a pretty good analysis.These numbers don't stack up. On a combined income of €117k, you are taking home approx €6850/month without any pension or health BIK, plus €420/month for children's allowance. Your car loan, mortgage, childcare and savings total €5770 so a family of 5 are surviving on €1500 a month for absolutely everything else?? You may be moving €3k into a savings account but it is not real savings. Even if you have significant bonuses on top of the €117k, it is still modest for a family of 5 and doesn't align with having a car loan of €745
I'm going to make some assumptions based on your username and your existing mortgage that you are 49/50 years old. Your current mortgage has approx 15/16 years remaining depending on the exact interest rate. With a new loan and similar term, you are looking at repayments of €2240 based on €360k (20%LTV) at 2.3% for 16 years. The other €20k of savings would disappear in the costs of buying, moving and furnishing.
You would be committing to €5k in mortgage, childcare and car loan payments which is madness on your income. You would have no safety buffer as pretty much all of your €110k savings would be used. Even if everything went well with the rental, it would still be cash flow negative so it would put you under severe financial pressure for the next 15 years.
I think your priority for now is to forget about the rental and look at clearing the car loan, improving your pension arrangements and probably most importantly is start planning for the potential expense of your kids going to 3rd level if that's what they are planning. Then you should consider whether moving is the right option
Thank you for your insights.Even if you have been approved for a loan to buy the home you want, you should not keep the apartment.
When you go have gone purchase agreed on the new house, you should put your own on the market.
There might be a gap between buying the new house and selling you apartment, and that is fine. It's a lot less stressful than trying to synch the sale of your own and the purchase of the other for the same day.
So when you can, sell your existing apartment and use the proceeds to clear the car loan and reduce the mortgage.
With that in mind, you should make sure that you are able to apply the sales proceeds against your new mortgage without penalty. For example, if you expect to have €60k, then make sure that €60k of your new mortgage is on a variable rate, so that you can clear it without penalty.
Brendan
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