To sell at a loss or sit it out

J

JSAA

Guest
Hi, just wanted to get a few opinions on my options.

I have a mortgage €235,000 with about 32 years left.
I am paying interest only (4.43%) for the next 6 months €800pm. If paying principle it would be about €1200.
I don't like the area etc. and moved to a rented house close to home a while ago, paying €800 rent. I have rented my house and receiving €800pm for that.

I have spoken to the lender and they have agreed that if I can get €185,000 for the house, they would put €50000 into an unsecured loan at the same interest rate i'm paying at the moment.

Would this be the best thing to do?

Thanks in advance for your opinions.
 
At the moment your gross rent return is 4.1% on your investment of 235K. Current interest charge is 4.43% and likely to increase. Tax charge would further reduce the rent if you are returning this for tax purposes!!
If the property is currently only worth 185K net your best option is to sell it and take the hit. Otherwise you are gambling on property price increase, interest rate and whatwill happen with the rent (i.e. Rise fall or lose tenant). realistically if it were me I'd put the property on the market and reduce the amount due to the lender. Having an unsecured loan will also give you a stronger negotiation position with the lender should you require any mitigation on loan repayments. Term of the unsecured loan should be at least commiserate with the remaining mortgage term
 
If you aren't even living there yourself and your lender agrees to a short sale, I think you will be wise to sell.
 
thanks for the opinions. All i have to do now is find a buyer :)
 
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