Money Makeover: Stuck paying rent and mortgage for 16 years due to planning issue, now "mortgage-free" but still renting and looking for options.

[MicroMachines99]

Personal details

Age: 39
Spouse’s/Partner's age: 37

Number and age of children: 2 (12 & 6)


Income and expenditure
Annual gross income from employment or profession: €60k
Annual gross income of spouse: €10k

Type of employment: Private sector, full-time

In general are you:
(a) spending more than you earn, or
(b) saving?

Covering bills, trying to save more

Summary of Assets and Liabilities
Cash: €45k*
Pension: €40k

*40k recently received due to disposal of property that I owned but could not live in or rent due to long-term planning issue.

House:
Renting: €1,050/month

Other borrowings – car loans/personal loans etc
Credit Card: €5k
Car Loan: €6k

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

Bought a site with a view to building in 2006, planning refused due to potential road upgrade then crash came in 2008 and road project shelved. Couldn't sell so was paying mortgage and renting at same time so no savings. Property sold at last and have €40k from the proceeds. Currently renting but may be getting bad news on that front in coming months. Would prefer to save for deposit and build on a site we have available to us but the thought of starting a mortgage again at almost 40 is depressing, particularly as I was essentially trapped in one through my 20's and most of 30's.

Pay off credit card in full? Then save as much as possible and maximise mortgage amount?

I realise this is not a dreadful situation to be in but could always be better, so any thoughts appreciated as to best options available.

 

[Horatio]

I think I'd clear the CC bill first, keep it clear & keep paying off the car loan monthly to demonstrate no discretionary debt on the CC.

Traditional building is a headache in the best of times but building right now will be both very expensive & time consuming due to the demand on that sector. If you're dead set on building can you consider prefabricated houses on your site? It should reduce your lead time & also reduce your exposure to cost drift & schedule drift.

I think I'd buy every time over building but that also brings its own challenges in current market generally.
Have you spoken to the banks or mortgage brokers about your max potential mortgage? This number will help you to determine the available paths forward.

Do you have an outstand Capital Gain Tax liability on the properry you just sold? Just a thought in case it 's not in your numbers.

 

[ClubMan]

Paying off both loans/debts is a no-brainer here whatever about anything else.

 

[Pinoy adventure]

+1 for clearance of both loans.