# Financial Healthcheck Please - any recommendations?



## softie (23 Jan 2008)

Age: 33
Spouse’s/Partner's age: 34

Annual gross income from employment or profession: avg 70k (tax exempt due to artists exemption) Artist - well established
Annual gross income spouse: 45k - sales

Type of employment: e.g. both self-employed 

Expenditure pattern: In general are you spending more than you earn or are you saving? We are saving

Rough estimate of value of home 580k
Mortgage on home 500k
Mortgage provider: INBS
Type of mortgage: Variable
Interest rate 5.73 (hanging in for possible demut)

Other borrowings – car loans/personal loans etc 35k but paid through spouses company

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: 30k Rabo, 30k AIB online demand, 15k AIB online demand (spouse) 25k UB esavings, 5k prize bonds, 10k AIB current a/c

Do you have a pension scheme? No - truly believe they are a gimmick and no tax benefits due to my tax-emempt staus anyway

Do you own any investment or other property? Yes

Value: 620k
Mortgage 260k INBS 5.9% Int only

REntal Income from this property 2800 per month


Ages of children: None

Life insurance: 1000 per year mortgage protection
VHI 1500 per year


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

Just a general healthcheck please. Would be interested to know the views of AAM members in terms of our borrowings compared to our savings and income. We plan to pay 60k off PPR mortgage soon to bring overall mortgage borrwoings down to 700k. Does this sound like a good idea or due to the credit crisis is it better to hang on to savings?

Wondered also if anyone had any other recommendations in terms of better management of our finances other than starting a pension as I truly don't have any faith in them.

Thank you


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## Purple (23 Jan 2008)

Sounds like a good plan. Your tax exempt status changes the usual advice that would be given. 
I'm amazed that you are getting €2'800 on a property worth 620k. Is it a short term let?


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## ClubMan (23 Jan 2008)

softie said:


> Other borrowings – car loans/personal loans etc 35k but paid through spouses company


Can you explain this please?


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## softie (23 Jan 2008)

Hi again, thanks for the replies. The investment property is in two units.

Car is for business as well as personal use but the car lease of 35k is paid through spouses business (sole trader) and accountant does what is required at income tax stage. I mentioned it as I thought it would come under borrowings?


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## Purple (23 Jan 2008)

Don’t get me wrong your income is high. It’s higher than it looks because of your tax-exempt status, but you are going to have your own table in Patrick Guilbaud and time soon.
I do admire how you have minimised your tax exposure though. Very well done on that front.


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## softie (23 Jan 2008)

Purple said:


> I do admire how you have minimised your tax exposure though. Very well done on that front.


 
In truth, I guess I only have Charlie Haughey to thank for that...


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## Mpsox (23 Jan 2008)

Your morgage interest rates strike me as high, I know you are hanging in there for demut, but is it actually worth it?. For example, on your investment property, NIB would offer you(according to their mortgage calculator) a tracker mortgage at 4.6%


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## softie (23 Jan 2008)

I know yes, its beginning to look like the INBS demut might not happen for some time so we will have to think strongly about moving for a better rate. 
As it is the INBS are giving us interest-only on the investment mortgage for an unlimited period, and I don't know if other mortgage providers do that too?


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## twentyfour (24 Jan 2008)

I too am with INBS and have been trying to bargain my similarly high variable rate down but they've told me they have 'rates on hold' at the moment while preparing for demutuliasation and will not be reviewing rates in the short term. I'm still trying to figure out if this is good or bad news.


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## snowflake (25 Jan 2008)

I'm curious about the artist's exemption - is there a very limited number of artists this is granted to, or are they fairly open (I've had a look at the Revenue site guidelines)


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## csirl (25 Jan 2008)

> Rough estimate of value of home 580k
> Mortgage on home 500k
> Mortgage provider: INBS
> Type of mortgage: Variable
> Interest rate 5.73 (hanging in for possible demut)


 
Should be able to get a mortgage rate at least 1% lower. Therefore you hanging in for a possible demut is costing you a few k per year. (the 1% of 500k extra). You need to weigh up the chances of demut v the amount you would likely get in demut v the cost per annum.


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