One income, need more space

S

stuckinflat

Registered User
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I need advice on what’s the best solution for our family, as we’re running out of space in our current house.

Age: 35
Spouse’s/Partner's age: 38

Annual gross income from employment or profession: 45,000
Annual gross income of spouse: nothing, recently made unemployed

Monthly take-home pay : € 2800

Type of employment: Private

In general are you:
(a) spending more than you earn, or
(b) saving?

Spending more

Rough estimate of value of home: 150,000
Amount outstanding on your mortgage: 50,000
What interest rate are you paying? 3.9%

Other borrowings – Credit card - € 2,000

Do you pay off your full credit card balance each month? No, balance is €2,000


Savings and investments:

Do you have a pension scheme? I do, but currently on hold to maximize income

Do you own any investment or other property? no

Ages of children: 4years and 8 months

Life insurance: yes


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

We currently live in a two bedroom apartment with two kids and the space is running out. I need to work from home occasionally, but this is near impossible with two kids at home. My husband has recently been made unemployed, but would be able to do some free-lancing work from home, if we had more space. He is minding the kids, so we have no childcare costs, while he is trying to find a new job.

We need advice on if we should sell our apartment and try to secure a new mortgage with only one income (might be impossible). Or should we rent our apartment and try to find a decent house to rent ourselves.

Our mortgage payments are quite low on the apartment, approx €700 a month and we could easily rent it out for €1,100.

A 3 bedroom house near our son’s school will be a minimum of €1,200 a month..

We are currently living hand to mouth as it is, as not sure what is the best option for us. Please help J
 
www.taxcalc.ie is suggesting that your take home pay including child benefit should be more in the line of €3,300 per month, given that your main outgoing (mortgage) is quite low I'm struggling to see how you're currently living hand to mouth as you don't have any child-care payments. Are you claiming all your tax credits?

If you think you can definitely rent out your apartment for that price and rent another at the price you've mentioned then you're going to be increasing your outgoings (not by much, but remember tax on rent, prtb, etc) which if you're struggling at the moment will not be a solution.
 
Where do you live and how much are houses in that area?
If it were me I would try to sell and then buy a new house. Or sell, then rent then buy the new place. You would find it hard to close the deal on the apartment and move into your new house on the same day if you did buy. So renting for a spell may be a real possibility in this scenario.

Our income is similar €43k we were offered 80k by AIB and 100k by BOI, stress tested at 6% interest rate. AIB say you need €2500 left over every month to live on before mortgage payments. BOI something like €1750 before mortgage repayments, for a family of 2 adults and 2 kids.
Would you buy a house for 200k in your current location?
Or a house with potential to extend into attic or back yard in 5yrs time say.
 
Thanks Sadie, that's exactly what I was looking for.

I reckon we need to go to a broker and see how much of a mortgage we would qualify for. In an ideal world, we would need €250k for a house, but we're also willing to buy an older property and do it up gradually.

I am not keen ot become a loanlord, as don't want to have that hassle and also, if we keep our apartment and rent a house, we would be very stretched to save for a decent deposit anyway.
 
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