Myself and my partner are buying a house wit a value of 300k (looking for a 92% mortgage). We are both separated although my partner got an annullment through the courts and is getting a payout from his partner. He was due to get this money last week but hasn't received it yet. We shook on the new house with the builder and auctioneer friday week ago but have not exchanged any deposit as we don't have it till my partners settlement comes in. I also have an apartment in my own name with a mortgage of 201k (apt was bought for 220k) and is now valued at 270k. Ideally what we want to do is hold on to the apartment and go intrest only for three years and also release about 30k equity from it. Does anyone know if we will be liable for stamp duty in the new house (2200 sq. ft.) or if I will have to pay a clawback on the apartment because it is going to be a rental property. My wages are 28k with bonus of 800 euro and my partners is 36k with 3k bonus. Do you think we will have any problem doing what we are doing or should I just sell the apartment. The rental income where the apartment is would be 750 euro a month. Any advice greatly received.
Trading up but keeping investment property
- Thread starter gortbeg
- Start date
Not positive about the stamp duty but if the settlement is delayed too much you may want to consider a PTSB one plan chequebook to release the equity in the apartment – its quick and you only use the money when you write a cheque so it gives you some control. If the settlement comes in in the meantime then just dont write any cheques.
I don't think it's possible on your income. On an investment mortgage of €231k the (stress tested anuity) payments would be €1564. Leaders discount the rent to 80% or €600 a month thus leaving a €964 shortfall. This would be deducted from your available income for the new mortgage so you would only qualify for circa €180,000 on the new property. This is before you start calculating the Stamp Duty clawback. Nonstarter I'm afraid.
Sarah
www.rea.ie
Sarah
www.rea.ie
Lenders will allow interest only as an option but they underwite the application on an annuity basis and at 2% over current rates. That's where my figures are from.
Sarah
www.rea.ie
Sarah
www.rea.ie
Could the apartment be let for more than €750 pm? Not all lenders underwrite based on an annuity repayment - some do so on interest only and if the rental income is 1.25 times the interest only repayment the loan is classed as 'self servicing'.
Your earnings would service a loan of 276k, but as Sarah W mentioned you are also relying on a portion of your earnings to service the shortfall between the actual rental income and the rental income required to cover a repayment.
I think your best bet would be to try Bank of Scotland...
Your earnings would service a loan of 276k, but as Sarah W mentioned you are also relying on a portion of your earnings to service the shortfall between the actual rental income and the rental income required to cover a repayment.
I think your best bet would be to try Bank of Scotland...
I think you have to ask yourselves if this is prudent borrowng - if you assume 100% occupancy at €750 per month and factor in all your PAYE income you are bringing in €76,800 to service debt (not including service charges, maintenance, insurance and day to day living costs) of €501,000; that's over 6.5 times total income.
Sarah
www.rea.ie
Sarah
www.rea.ie
Why not just sell your apartment and take the profit from it to help finance your new home instead of taking on a huge amount of debt and the hassle of being a landlord? Your own mortgage will be much lower and you won't face the worry of an empty rental property, rising interest rates, tax on your rental income etc etc.
T
thewatcher
Guest
Sure haven't you heard,it's all about "investment property" in the new ireland !.
I
irishpancake
Guest
Marg said:
Very succinct indeed
I think this is the best piece of advice i've seen or heard in a long time.
It should be printed out, framed and hung on the wall.
Ppl need to realize the "good times" are over.
Thanks for all your advice - have decided to sell the apartment and finish the new house outright - its a big house so will cost a lot to fit it out will also have a nice tidy sum in the bank left over and no worries every month bout renting the apartment. I'm a born worrier when it comes to money so I'm opting for the easy life. Thanks again.