Apologies in advance for the long winded question but I want to make sure I make the correct decision.
I currently have a house (2 years old) valued at 250-260k with a mortgage of 175k. I am moving back home and am building a new house (already have the site paid for) that I expect to cost 200k, which I will need a mortgage for. My choices are to either sell the current house, thereby reducing the mortgage I will need for the new house or to keep the current house and rent it out.
If I sell the house I will be able to have a mortgage of 120k and thereby low repayments every month. If I keep the house the rental will almost cover the current mortgage - it will probably fall about €100 per month short - but I will have a larger mortgage on the new house.
What are peoples opinions - sell or rent? Also, if I do sell I will be able to save a large sum every month that I would intend to use towards a pension fund. However, if I keep the house I would be able to use this as my pension in the future.
Finally, what are the tax implications of renting the house. How is the rental income declared? The current house is in joint ownership and so will the new one be. Is it possible for us to claim mortgage interest relief on one house and the other person on the other house?
Sorry for all the questions but any advice/feedback would be greatly appreciated.
I currently have a house (2 years old) valued at 250-260k with a mortgage of 175k. I am moving back home and am building a new house (already have the site paid for) that I expect to cost 200k, which I will need a mortgage for. My choices are to either sell the current house, thereby reducing the mortgage I will need for the new house or to keep the current house and rent it out.
If I sell the house I will be able to have a mortgage of 120k and thereby low repayments every month. If I keep the house the rental will almost cover the current mortgage - it will probably fall about €100 per month short - but I will have a larger mortgage on the new house.
What are peoples opinions - sell or rent? Also, if I do sell I will be able to save a large sum every month that I would intend to use towards a pension fund. However, if I keep the house I would be able to use this as my pension in the future.
Finally, what are the tax implications of renting the house. How is the rental income declared? The current house is in joint ownership and so will the new one be. Is it possible for us to claim mortgage interest relief on one house and the other person on the other house?
Sorry for all the questions but any advice/feedback would be greatly appreciated.