Where can I save now..........if things get worse what will I do

[den]

Age:42
Spouse’s/Partner's age: 35

Annual gross income from employment or profession: €0 - Self Employed
Annual gross income of spouse: €50,000 - Public Servant


In general are you:
(a) spending more than you earn? no
(b) saving? 300p/m

Rough estimate of value of home bought 2006 = €150,000
Amount outstanding on your mortgage: €190,000 @Var 2.63% Repay:€666(30 years remaining) Claiming tax relief (TRS)

Other borrowings –
Credit Union home improvement loan €34,000 @6.5%, 500p/m

Do you pay off your full credit card balance each month? Yes
If not, what is the balance on your credit card?

Savings and investments:
£20,000 Sterling in a current account with UK Bank
€300p/m to Credit Union

Do you have a pension scheme?
€20,000 in personal pension sheme
€20,000 in a previous employer scheme. Not defined benefit

Spouse, Public Servant pension


Do you own any investment or other property?

Ireland Bought 2007 (30 years remaining)
Value €250K Morgage €295K Var:2.74% Repay:€1287 Rent:€775
England Bought 1998 (28years remaining)
Value £180K Morgage £100K Var:1.97% Repay:£150 Rent:£750
France Bought 2001 (6 years remaining)
Value €200 Morgage €121K Fixed: 5.2% Repay:€980 Rent:€900

Ages of children: 0

Life insurance: With morgages only


What specific question do you have or what issues are of concern to you?

At the moment I am self employed but bringing in very little at the moment due to collapse in ecconomy. I am setting up a new business which will not need huge capital but would not expect great income for the first six months.

We are ok at the moment but we want to prepare for increases in interest rates and use savings efficiently. Once my income comes back we will be ok but until then we were thinking of putting UK savings and Irish savings to the Credit Union loan and get rid of this asap.

I don't have a huge pension so the properties are ideally for that.

1. What other areas could we save in the short tem?

• Current Home was bought by my wife before we got married. If we move to investment property (in joint name) in Ireland and rent out present home would we be able to claim greater tax-relief there ?
• Morgage not sure If we can make any savings ?
• I assume I cannot claim Job seekers allowance (if I am means tested) ? Should I be signing on anyway? what the advantage?
• Can I take out the money I paid into previous company pension scheme?

2. If my own income does not increase and interest rates are rising which properties would I sell?

I am open to any solutions, the above are just my own initial ideas...

 

[chlipps]

I would be slow to move svaings over to the credit union loan as you dont have a rainy day fund. I think with all your loans that you need the ready access to the 20K.

Have you considered selling one of your properties to reduce your risk? You do have substantial amount of money borrowed. Would you consider selling house you bought in 2007 in ireland. Your repayment on it is much higher than the rent. If you sell and release the 45K then that would also clear your credit union loan.

I would not be saving 300 per month to the CU. I would either add this to the 500 repayment or open a higher interest savings account as that is not getting any interest in CU savings account

 

[den]

[Would you consider selling house you bought in 2007 in ireland. Your repayment on it is much higher than the rent. If you sell and release the 45K then that would also clear your credit union loan.

Chlipps.. Thanks for the comments. Sorry I made a mistake the Irish Investment property 2007 should have read Value 250K Mrge 295K. I have edited above to reflect this. So I am in negative equity rather then able to release 45K.

Would you still sell it?

 

[chlipps]

Pity that is the case. Before I comment further, please clarify if repayment on UK house is interest only... 197 per month for 100K mortgage sounds too low. Please check the values and revert and then I will suggest way forward, which maybe others will also review and try assist

 

[den]

yes.. UK morgage of £100k is interest only. The values are correct now as above..

 

[chlipps]

I would sell UK property and use the approx 90K euro released to clear CU loan and also to have a more substantial rainy day fund. Not sure what capital gains you pay (either here or UK?).

As a result, you will still have PPR, house in france and house in ireland. I would not sell house in ireland as rent from france will be profit in 6 years and you should be able to offset some of the rents against each other, provided budgets doesnt change that. Also the sale of the irish rented house would result in 45K negative equity and you dont have that money at the moment to pay it off. So I suggest you do not sell the irish rented property.

As a result of CU loan being cleared you will then be saving 800 euro per month which I would lodge into regular saver (EBS or PTSB - see reg saver best buys)

Best of luck in what you decide, but I think sale of UK property would be best solution as above