Option to trade up?-single parent

I

Isabel S

Registered User
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Looking to see if I can trade up and seeking advice:

Valuation of apartment: 350,000 eur
Remaining on mortgage: circa 95,000 eur-fixed for next 2.5 years
Potential deposit: 70k in shares; 20k cash
Salary: 83keuro; public sector; age 42 years old
I am a single parent with one child (under 4 years) if that makes a difference to my disposable income calculation by bank; combination of montessori and help from family in relation to childcare. My ex partner splits the childcare and all costs related to our child 50/50. No loans apart from mortgage. Credit card balance paid off each month in full.

I would like to move to a house in the foreseeable future; what would be the max amount I could borrow and which would therefore dictate my max budget.

Separately I have had to pay circa 16k in defect levys for my apartment and I would be concerned about my rights should the government actually issue redress for owners and I have sold my apartment. Would keeping the apartment as a rental be an option?

Thanks in advance
 
You shoule be in a strong position given equity, salary, age assuming you sell apartment..
I am also a single parent and recently sold and purchased and obtained loan of 3.5 times salary and got a low rate due to LTV being below 60%.

If you try to hold onto the apartment you probably wont get a suitable loan, but you could check with a broker. Also as it would become an investment property the loan would move to higher interest rates. You could set yourself up very well if you sell and then purchase a suitable house and get a decent rate due to LTV and set yourself up with emergency fund.

I dealt with an excellent broker and got my mortgage with Avant. You might even be able to get a loan to income exemption, but you might not need that. One thing infound is that the criteria diffeted across lenders so its worth using a broker.
 
Isabel S said:
I have had to pay circa 16k in defect levys for my apartment and I would be concerned about my rights should the government actually issue redress for owners and I have sold my apartment. Would keeping the apartment as a rental be an option?
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Absolutely not.

Assume you don't recover the €16k. Trading up from a €350k apartment to a €550k house - €16k is not a factor in the decision.

Even if it were possible, you should not keep the apartment as an investment.

You will be busy enough as a single parent - you do not want the headache and heartbreak of property management.

Brendan
 
Isabel S said:
I would like to move to a house in the foreseeable future
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How much would a house you would like to live in cost?

You can probably borrow €280k , so with €350k equity, you could buy for €630k.

But do you want to saddle yourself with such a big mortgage?

If you have to stretch that far, then do.

But it would be better to be under less pressure.

Brendan
 
I would be look at house in area of 550k if thats not too much of a stretch?

What things should I have in place/prioritise over trading up? I'm making the minimum pension contributions. I'm aware I dont have life insurance or made a will for the future. Is the money makeover section best place here to advise?

dubdub123-could I possibly private pm of details of the mortgage broker you used?

Thanks for helpful guidance
 
Isabel S said:
could I possibly private pm of details of the mortgage broker you used?
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Just remember that AIB do NOT offer mortgages through brokers. Haven (the the broker channel of EBS) do, but they have different underwriting criteria, so also apply directly to AIB.

Isabel S said:
Potential deposit: 70k in shares; 20k cash
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Is the 70k net of all taxes due on sale?


Isabel S said:
I would be look at house in area of 550k if thats not too much of a stretch?
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You shouldn't have any problems getting that, and being able to service on your salary, so long as you sell the apartment.

Isabel S said:
What things should I have in place/prioritise over trading up? I'm making the minimum pension contributions. I'm aware I dont have life insurance or made a will for the future
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Your biggest obstacle is a logistical one. I think you will have to sell the apartment to move, and trying to co-ordinate sale & purchase together can be stressful, especially with a child. If you have somewhere you can move on a temporary basis will make things easier.
 
Isabel S said:
I would be look at house in area of 550k if thats not too much of a stretch?

What things should I have in place/prioritise over trading up? I'm making the minimum pension contributions. I'm aware I dont have life insurance or made a will for the future. Is the money makeover section best place here to advise?

dubdub123-could I possibly private pm of details of the mortgage broker you used?

Thanks for helpful guidance
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Yes please do that. They were extremely efficient and looked at various options.
 
€255k equity and €70k from sale of shares (is the 70k before or after taxes?). Let's say €300k. That leaves you needing €250k mortgage, which is 3 times your salary. Sounds like it should be comfortable enough. I'd keep that 20k cash you have to cover expenses, solicitor fees, stamp duty, moving etc. Good luck with it.
 
Isabel S said:
Potential deposit: 70k in shares; 20k cash
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If you are all set on trading up soon you should sell the shares and move to cash.

You don’t need the short-run ups and downs you get with equities.

Isabel S said:
Remaining on mortgage: circa 95,000 eur-fixed for next 2.5 years
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Not only will your mortgage balance will be higher but most likely you’ll have to refinance at rates today which are in the 4% region. Your mortgage is going up by nearly €1,000 a month. You may need to demonstrate to a lender that you’ve been putting that much aside every month for six months in advance of a loan application.
 
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