# Advice needed for family financial mortgage issue



## parkmagic (17 Jan 2009)

*My income 54000*
*Partner 60000*

*Credit Union loan 28000*
*Credit card bill 6000*
*Savings 6000 credit union 2000 savings account*
*Mortgage 1000 per month aprox.*

*Mortgage cost 205000*
*Value of property 270000 From a high of 410000*
*Children 2*

Question. I am thinking of changing my mortgage provider and consolidating the existing loans above. I need about 10000 Euros for a particular purpose also now. 

This will mean I will need to get a mortgage of 255000. 

However I am also planning to move jobs sometime early next year (2010) and will be hoping to buy a property then. (I really want to keep my existing property and rent it as its in a brilliant location)

My problem is that will my ability to buy a property in 2010 be effected badly by the fact that my new load to value ratio will not be great. 

Can any one see any dangers in what i am doing?


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## doodles (18 Jan 2009)

I'm sure you've asked yourself the following, but here goes just in case:
 - Considering that as a couple you are earning good money and given your mortgage payments appear relatively low (1000K p/m) that on the scale of things I would feel you should have more in savings to cushion yourselves should you ever be in need of additional funds.  That said I would be wary of borrowing additional funds.   
- Consolidating and possibly switching providers is definitely worth looking into and can probably reduce the amount you are paying out each month and if you're lucky reduce or at least keep the same term years.  
- Depending on what line of business you're in I wouldn't bank on changing jobs next year as I think the changes we're going through here now will be the same for quite some time.
- With the way things are now and also owning an investment property, I wouldn't dream of purchasing another one these days because it's very shaky ground - what if property goes unrented, do you have the funds to pay the rent for an extended amount of time - in your case, I would have to say no; with more and more foreigners returning home there will be an abundance of rentals around; also lots of people seem interested in the schemes that more and more builders are opting for - example, paying appx 750 p/m for a 3 bed semi for 3 years with option to buy at the end minus the rent you've been paying which allows renters to save up for their deposit, which at the end of the three is less due to the cost of the house price being reduced to account for the three years rent paid.  
- What interest rate are you paying on the credit card and are you paying just the minimum each month?  If so, this is definitely costing you a lot of money.
- If at all possible I would definitely encourage you to consolidate all your bills considering the interest rates available now are so low.  Have to mention that if you could forgo adding the additional 10K to avoid adding to the costs, do that.  
- According to your debts above, with the 10K included it would seem you only need a mtg of 249K - where is the other 6K going?

Good luck


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## michaelm (19 Jan 2009)

parkmagic said:


> Can any one see any dangers in what i am doing?


Let's see . . you have sizable debt, house prices are collapsing, I doubt rental income or demand is on the up, no job is secure and the financial system is in meltdown . . you want to increase your debt, change jobs, buy another property and become a landlord . . I think there are dangers, but maybe fortune favours the brave.


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## parkmagic (19 Jan 2009)

michaelm said:


> Let's see . . you have sizable debt, house prices are collapsing, I doubt rental income or demand is on the up, no job is secure and the financial system is in meltdown . . you want to increase your debt, change jobs, buy another property and become a landlord . . I think there are dangers, but maybe fortune favours the brave.


 
Funny, when you put it that way.


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## parkmagic (22 Jan 2009)

thanks for the advice/perspective doodles.


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## Bronte (23 Jan 2009)

Someone on your salaries should have zero on their credit card and a lot more savings particulalry as your mortgage payments are relatively low.  I recommend you tackle your credit union loan and credit card and start saving.  Then when you do purchase you should have a minimum of 10% plus enough to furnish it etc.  Why do you not want to specify what the 10K is for?  Be aware the being a landlord is not as easy as some people think.  What is the rental for your area?  This is in order to assess if what you propose is the best option.


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## parkmagic (23 Jan 2009)

Bronte said:


> Someone on your salaries should have zero on their credit card and a lot more savings particulalry as your mortgage payments are relatively low. I recommend you tackle your credit union loan and credit card and start saving. Then when you do purchase you should have a minimum of 10% plus enough to furnish it etc. Why do you not want to specify what the 10K is for? Be aware the being a landlord is not as easy as some people think. What is the rental for your area? This is in order to assess if what you propose is the best option.


 
Thanks for the perspective Bronte,

Agree with your comments. 

Rental in my area is pretty good as its close to Luas and city centre. I want to keep the house as I know in 20 years time when the kids are in college etc it will be invaluable.


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## Askar (23 Jan 2009)

If you are going to move house you will need at least 10% deposit and will have to pay stamp duty. At the moment you have debts to pay, so how are you going to square that circle? Is is the case that your lifestyle does not support much savings from your income? If so, I don't see how you will be able to move next year.


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