N
nmitchell
Guest
Hi there was wondering if anyone could comment on the following...apologies for the rambling nature but my head is wrecked from it....
Existing tracker mortgage: €150,000 at 1.9% with repayments of €690 per month. Parents gave €50k loan during for purchase of the house in 2003 that will need to be paid back over medium to long term.
Realistic House Sale Price: €150,000
Original House Purchase Price: €260,000
Realistic sale value of wife's property (owns 50%): €110,000 (her portion)
Wife's portion of the mortgage: €130,000
2 steady jobs with annual income of €110,000.
Here is the delema....She has to sell her house as her co-owner of the house wishes to sell and so the agreement is we have to sell also. We are also looking to move to Galway over the next 1-2 years, if not sooner. On top of all that, I am looking to start my own consultancy business over the next 2 months also.
Option 1: Sell both houses. Therefore we will be €20k in debt with her house sale and €50k in debt to my parents with the sale of my house. We have enough savings to pay off the €20k debt but not the €50k....this will have to be paid off over the medium to long term. The benefit of this option is that we no longer are indebted to the banks, will have no mortgage and will therefore possibly be in a position to get a mortgage in the future in Galway. The drawback is obviously being €50k in debt to my parent who will need the money as they get older.
Option 2: Rent out house to lodgers or the RAS scheme. RAS have said they would be interested and would be able to rent for 5 years...the first 2 years would be €890 per month (which is almost market value) and a rent review after 2 years which is likley to reduce it further according to market trends. However, if I rent out the house, i would loose my tracker mortgage and be lumped with a variable rate of 4.3% ish. Given the likely increases in interest rates over the next few years and likely decrease in rent from RAS in 2 years, we would be loosing money on the house.
Regards
Nicholas
Existing tracker mortgage: €150,000 at 1.9% with repayments of €690 per month. Parents gave €50k loan during for purchase of the house in 2003 that will need to be paid back over medium to long term.
Realistic House Sale Price: €150,000
Original House Purchase Price: €260,000
Realistic sale value of wife's property (owns 50%): €110,000 (her portion)
Wife's portion of the mortgage: €130,000
2 steady jobs with annual income of €110,000.
Here is the delema....She has to sell her house as her co-owner of the house wishes to sell and so the agreement is we have to sell also. We are also looking to move to Galway over the next 1-2 years, if not sooner. On top of all that, I am looking to start my own consultancy business over the next 2 months also.
Option 1: Sell both houses. Therefore we will be €20k in debt with her house sale and €50k in debt to my parents with the sale of my house. We have enough savings to pay off the €20k debt but not the €50k....this will have to be paid off over the medium to long term. The benefit of this option is that we no longer are indebted to the banks, will have no mortgage and will therefore possibly be in a position to get a mortgage in the future in Galway. The drawback is obviously being €50k in debt to my parent who will need the money as they get older.
Option 2: Rent out house to lodgers or the RAS scheme. RAS have said they would be interested and would be able to rent for 5 years...the first 2 years would be €890 per month (which is almost market value) and a rent review after 2 years which is likley to reduce it further according to market trends. However, if I rent out the house, i would loose my tracker mortgage and be lumped with a variable rate of 4.3% ish. Given the likely increases in interest rates over the next few years and likely decrease in rent from RAS in 2 years, we would be loosing money on the house.
Regards
Nicholas