# New baba due soon. Need to take stock keep rentals or sell up.



## Frank (14 Sep 2020)

Info 

Rented House interest only due Nov 27 on a tracker 
owe 185 value 220 bought for about 170 
Rent 1150 pm 

Rented apt paying down capital 
Owe 150 value 210 bought for 270 
rent 1120 pm 
20 ish years left on Mortgage

our home 
owe 145 value about 380 
Over paying baout 400 om on mortgage 20 ish years left

I am 44 and work for a semi state for the last 12 years in a DB pension so will get 33 of the 40 years.
Earning 75k Sakary 

I have managed to save about 100k in bank and CU 
No loans other than 

Wife is 39 is a a solicitor 2 years PQE
Salary is 55k no pension to speak of and not sure if she will get maternity top up in current pandemic

I am looking for advice on next step
Questions 
1. Should I put some of my savings into our own house as it is the highest interest rate.
2. I know if I sold both the rentals now I could be clear of them and maybe 50k ish ahead with capital loss of apt balancing out the capital gain of the house.
3. What is the best long term saving for the new baby ( we were thinking child allowance plus a topup from us over 20 years)

Or maybe just hang tough for 3 to 5  years and see what happens and hopefully clear all 3 mortgages on the back of selling the 2 rentals and some savings.  
I know crystal ball stuff.


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## Frank (20 Sep 2020)

looking at bonkers I believe I could drop maybe 50k off the house mortgage and drop the time to 10 years or even less and reduce my monthly mortgage payment. 

Avant money  look to be offering 1.95% fixed for either 3 or 5 or 7 years. Tempted by the 5 year to leave me an option then again 

With equity and cash I could sell out and clear the mortgage  altogether, getting out of the rental game could be worth dropping the pain too.
Only down side I see is that keeping 1 at least could supplement my pension.


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## Seaniemed (9 Oct 2020)

I'm no financial expert but also have a baby on the way. Your debt makes me nervous (I might get lots of criticism for this)

Would ye not just go clear the mortgage on your family home and protect your family unit?

Then you could look at another BTL surely - it's not as if you're sitting on a goldmine with either of those properties
Illness or tragedy could strike and leave ye at risk with the bank looking for all three mortgages

Being mortgage free at 44 could allow you guys to max out your pension pots

Or at least get rid of the negative equity house?

I'm sure I'll learn from the responses!


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## PebbleBeach2020 (9 Oct 2020)

How much debt is too much debt? We have rentals too and in similar situation to poster.


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## Protocol (9 Oct 2020)

I'm curious how anybody can owe more than they paid for a house, even with an interest only mortgage.

Paid 170k.

Many years later 185k is owed?


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## Seaniemed (10 Oct 2020)

PebbleBeach2020 said:


> How much debt is too much debt? We have rentals too and in similar situation to poster.



I see your point but as a novice to me it makes no sense to struggle with rentals when no progress being made with the capital owed

If you were making progress on the capital with one property as a BTL then it makes more sense


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## moneymakeover (10 Oct 2020)

Protocol said:


> I'm curious how anybody can owe more than they paid for a house, even with an interest only mortgage.
> 
> Paid 170k.
> 
> Many years later 185k is owed?


Missed payments, arrears.


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## moneymakeover (10 Oct 2020)

Frank

I don't think your situation is either too bad or too unusual.

I think over the next 20 years if you stick to your original plan and pay down the debt you'll be in a strong financial position with two rental properties debt free.

You owe 480k. That's not excessive. Consider some people starting out owe 480k on the pdh with no rental income.

You have demonstrated you can pay down debt already. And you have 100k in savings. Use the 100k to pay down some debt.

If you can clear the 150k loan you'll have 1120 in rent monthly basically for free.


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## Peanuts20 (12 Oct 2020)

There is a bigger question here that you need to consider, will you or your wife return to work full time once junior arrives or are you going to have to pay for child care. ? You should really consider a broader review of your financial position

Secondly, with a smallie, and with all the time that will consume over the next few years, do you have the time to be a landlord?


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