# Money advice



## saintstephen (21 Feb 2008)

Age: 35
Spouse’s/Partner's age: 32

Annual gross income ; 50k 
Annual gross income spouse: 18k

Type of employment: Both PAYE Private sector

Expenditure pattern: In general are you spending more than you earn or are you saving? No

Rough estimate of value of home ; 300k
Mortgage on home ; 44.5k (€714/month)
Mortgage provider: Permanent TSB
Type of mortgage: One Plan variable 5.44%

Other borrowings – None

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: €1000 current account

Pension scheme? Private Pension €64/Month, worth approx 8k

Do you own any investment or other property? 2 x 2 bedroom townhouses
House 1 ; worth 160k ,mortgage 127k interest only, rented €160/week
House 2 ; worth 160k ,mortgage 142k interest only, rented €160/week

Ages of children: 13, 10

Life insurance: On the properties


*What specific question do you have or what issues are of concern to you*? We have been agressively paying our home mortgage of 44.5k ( its the deposits + legal fees etc of the investment properties) and our biggest concern is to pay this asap.
Does anyone feel its worth move this mortgage 5.44% seems high, but 44.5k not huge in terms of mortgage.
The older the family becomes (parents included) the more we seem to spend week to week.
I need to contact the revenue in regard to tax for the investments..this week.
The aim is to pay off our home mortgage, increase savings then start paying the capital off the investments.

Is all this OK. Can we improve things ? Any advice welcome


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## CashPoor (25 Feb 2008)

What about moving the mortgage liability to your investment properties, since this interest is tax deductable.  I'm not sure if you would be able to do this now, or if the tax man would view it as being money paid off your PPR.  Anyone any ideas on this?  I'm certainly not a tax expert


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## ClubMan (26 Feb 2008)

CashPoor said:


> What about moving the mortgage liability to your investment properties, since this interest is tax deductable. I'm not sure if you would be able to do this now, or if the tax man would view it as being money paid off your PPR.  Anyone any ideas on this?  I'm certainly not a tax expert


No - you can't do this. You can only offset interest on loans used to purchase/renovate an investment property against rental income. You can't do this with loans/topups used for other purposes (such as paying off your _PPR _mortgage).



saintstephen said:


> Does anyone feel its worth move this mortgage 5.44% seems high, but 44.5k not huge in terms of mortgage.


If you can save money (after allowing for any remortgaging costs that may arise) on another mortgage package then why not?


> I need to contact the revenue in regard to tax for the investments..this week.


What exactly do you mean by this? Are you behind? Have you never done this before (in which case you should get advice/an accountant).


> Is all this OK. Can we improve things ? Any advice welcome


Why are you so concentrated in a single asset class/risk reward profile/geographic region (domestic _Irish _property)? Do you realise the risks of concentrating in this way? Might you not be better off increasing your pension savings than paying off the mortgage to avail of the significant tax reliefs?


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## saintstephen (26 Feb 2008)

Firstly thankyou for taking the time to reply.


> You can only offset interest on loans *used to purchase*/renovate an investment property against rental income.


The deposit used to purchase the 2 investment properties (47k) was borrowed this on the equity of our home, considering this, is it possible to move this debt to the investment properties mortgages ?



> If you can save money (after allowing for any remortgaging costs that may arise) on another mortgage package then why not?


Could anyone recommend a product that would be good for moving a small figue

[QUOTEI need to contact the revenue in regard to tax for the investments][/QUOTE] 
I've never contacted them, I don't believe there is a finacial liability just needed to make a return. I have read the info here and on revenue and was going to contact them this week.



> Why are you so concentrated in a single asset class/risk reward profile/geographic region (domestic _Irish _property)? Do you realise the risks of concentrating in this way? Might you not be better off increasing your pension savings than paying off the mortgage to avail of the significant tax reliefs? Yesterday 06:52 PM


I realise this and don't plan on anymore property investment.
We were lucky we bought our ppr in '96 for £38k and work hard to pay off that debt... and wanted to take advantage of being young and having equity ...so we decided to buy the investment properties.
I really want to sort out the remaining 44.5k asap on our home, then we can build up our savings.


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## ClubMan (27 Feb 2008)

saintstephen said:


> The deposit used to purchase the 2 investment properties (47k) was borrowed this on the equity of our home, considering this, is it possible to move this debt to the investment properties mortgages ?


I think so. But you should not have been claiming owner occupier mortgage interest relief on it to date so if you have then you need to sort this out (e.g. repay it!).


> Could anyone recommend a product that would be good for moving a small figue


Something lost in translation? Maybe you can clarify?


> I've never contacted them, I don't believe there is a finacial liability just needed to make a return. I have read the info here and on revenue and was going to contact them this week.


I'm not sure that I understand but bear in mind that if you have a rental property but are not making a profit from it you still need to file a return as far as I know.


> I realise this and don't plan on anymore property investment.


But what about rebalancing your investment portfolio away from property perhaps?


> We were lucky we bought our ppr in '96 for £38k and work hard to pay off that debt... and wanted to take advantage of being young and having equity ...so we decided to buy the investment properties.
> I really want to sort out the remaining 44.5k asap on our home, then we can build up our savings.


What about the pension issue that I mentioned?

Maybe you should consider getting independent, professional advice from an independent intermediary who can do a more detailed fact find/financial review to better assess your overall circumstances, needs and what might be suitable savings/investment options?


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## Funnycide (27 Feb 2008)

I really want to sort out the remaining 44.5k asap on our home, then we can build up our savings.[/quote]

Based on paying it over 5 years, you would save c.€20 per month if the rate was reduced to 4.50%.  If you can get your legal fees for less than €1200.00, then it may be worth considering.


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