Possible Redundancy and House Sale

E

Elveera

Guest
Age: 31

Annual gross income from employment or profession: 46,500
Partner: 45,000

Type of employment: Charity sector, management level, and TV production industry, technical side

In general are you:
(a) spending more than you earn: No
(b) saving: Yes, I am saving €100 a month into Rabodirect. Boyfriend saving nothing at the moment.

Rough estimate of value of home: 320,000 (can’t guage what it’s worth as houses in the area are all dropping hugely, this is a positive take) 19 years left on the mortgage. Repayments are €1440 per month.

Amount outstanding on your mortgage: 308,000

Other borrowings – car loans/personal loans etc: No

Do you pay off your full credit card balance each month: Yes. No debt there.

Savings and investments: He has no pension but savings of about €10,000. We have a car worth about €1,750 which we bought for cash - no loan.

Do you have a pension scheme: I have pension in AIB, which has halved, now worth about €11,000.

Do you own any investment or other property: No

Ages of children: None


Question 1: My boyfriend’s job is very shaky and in the past 3 months his employer, who has cash flow problems, is paying him ‘late’ and in instalments. I could envisage him being laid off by April 2010, but we don’t know. I would like to plan for this eventuality and so would like advice on how much money we need to save up for this, and what kind of help he would get from the social welfare.

Question 2: We bought in mid 2008 but had no idea prices would drop so far. Houses in our area (North Inner City) are plummeting in value and houses on our road are not selling. I am expecting we will be in negative equity by the New Year and I am finding the area rough to live in. I would like advice on whether (a) the best option is to wait for the prices to stabilise and keep saving or (b) sell now and start renting in a nicer part of town. I imagine the house would not sell for months and months, so (b) is probably not an option.

 
You could try to put your house on the market if you really want to get out of the area. If you got what it's worth or close to it you might be as well to cut the cord.
What is your take home pay and what are the other types of expenses you have? are you spenders or savers?
Would it be a possibility to rent out the house you are in and rent somewhere nicer yourselves.
Can you take in a lodger to maximise income coming in?
Can your boyfriend start looking for a job now?
 
Between the 2 of you have gross of >90k... i'm surprised that you only manage to save 100 euro per month between the two of you. You have considerable income at the moment and should be trying to save much more per month and try build up as much savings as possible

I think you should keep the house and get your partner to start looking asap for work... Will he get a redundancy payment if he stays working and left off?
 
exactly. where is your money going. your salaries would be close enough to me and my partners and we save 1500 a month between us.
 
You need to be saving as much as possible. I can't believe you are only saving €100 a month. Where is the rest going? Keep a spending diary.....you should be saving at least €1000 a month with no others debts, no dependants.

Are you sepending it on lifestyle? Like most people batten down the hatches and focus on saving and repaying your mortgage debt. If possible yr boyfriend needs to look for another job. It doesn't sound great if they can pay him on time.

Not much details on the house but as a guide take peak price and take off 50%. Most people know peak price as we were all so property obessed. Id me suprised if you are not in negative equity given the time you bought.

If you are in NE then with low savings you are likely to be stuck where you are for a while.
 
Hi

I think you are all really correct to point out the low savings per month: I think this has to be addressed so that's a great starting point. I will have to start a spending diary. I wouldn't really say it's going on 'lifestyle'. We do have between 300-500 per months as surplus in our joint account, so that in a sense is 'saving' but we keep it there for household expenses like a new washing machine etc. I just don't think of that as savings as it is in a current account for use, not in a savings deposit where it is earning interest.

Peak price would have been €600,000 probably (shocking) - so we'd be at €300,000 by that calculation. So yes, in NE at this stage.

I am going to get straight down to improving on savings.

AS for the job, the TV industry is very small and limited in Ireland. Already he has his CV done up but needs to get it circulating/start networking etc.
 
i dont want to rant on about saving but i think it is common practice in nearly house in ireland at this stage...everyone building the nest egg for the rainy day situation..so enough said on that

Bad idea to leave money in current account... I suggest you open the EBS family saver (regular saver) account asap.. (i have no connection with them)... set it up a direct debit of 1000 eur per month out of your joint account ... you should have no problem saving 1000 per month (you will need to move it after 1 yr as int rate will then reduce)... This time next year you will have a nice 12K+int!!
 
Strikes me as a big concern that neither OP nor partner have much of a pension. Maybe should both be throwing extra savings into an AVC PRSA for a rainy day ? Maybe a bit of Income Protection insurance could be explored as well ? If either of you get sick, you are up the creek without a paddle !
 
Considering interest rates are likely to rise in the next year, your mortgage repayments will be quite high to what you are paying now.

If your partner lost his job then you will struggle to repay the mortgage. Personally I would rent and put the property on the market for a reasonable price in order to attract a buyer IF either one of ye lost yer job.
 
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