# Am I mad to want this - I know I am mad to be paying what we are paying at the moment



## anniemac (7 Jun 2009)

Would need to re-structure loans currently paying 1,600 a month on 40,000 and 500 on our mortgage we would like to buy a property in the US as prices so very low at moment, but can see a great rise moving in and difference in prices from 2 years ago- $217 now approx $89, we go over each year anyway and hope when we retire to spend a few months over there per year. Done the math’s on this and can cover payments if we restructured what we are currently paying think it would need to be on a second mortgage – don’t want to come off tracker for our house- but who is giving out mortages to Self –employed now?
Age: 									        45
Spouse’s/Partner's age: 						48

Annual gross income from employment or profession: 		€45,000- new 
  									business – 18months Annual gross income of spouse:					€25,000

Type of employment: e.g. Civil Servant, self-employed [both self -employed]

In general are you:
(a) spending more than you earn, or				way more- on    
                                                                      repayments not lifestyle  
(b) saving?                                                                  

Rough estimate of value of home					249,000
Amount outstanding on your mortgage: 				88,000
What interest rate are you paying? 				1.85% tracker

Other borrowings – car loans/personal loans etc	        p.Loan- 18,000
    									p.Loan -10,000

Do you pay off your full credit card balance each month? 	never
If not, what is the balance on your credit card? 		12,000

Savings and investments:						3,000 

Do you have a pension scheme? 					Partner does

Do you own any investment or other property? 			Pony – 10,000

Ages of children: 							        20/16

Life insurance: 						to the hilt way too much


would like-  	
FULL AND TOTAL  OPTIONAL 	       ASAP	
MORTGAGE	        88,000.00 		                                                                                           IN PLACE WITH TRACKER	
LOANS	        40,000.00 		                                                                                                      40,000.00 	
WORK OUTSIDE	6,000.00 	                                       6,000.00		
WORK INSIDE	3,000.00 	                                       3,000.00		
CAR				                                              24,000.00 
HOUSE IN US	70,000.00 	                                      70,000.00		
COLLEGE FEES DAUGHTER 	                                      20,000.00 	                                          NO IMMEDIATE NEED FOR 2yrs                 

Will buy car from business in 2010 so not immediate either -no car payments at present, am i mad to be looking at this - have worked hard and not a flash  life style


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## z109 (7 Jun 2009)

*Re: Am I mad to want this - I know I am mad to be paying what we are paying at the mo*

First, well done on having a ECB+0.85% tracker. It does have a bit of a drawback. You won't be able to refinance without losing this (IMO). Any calculations you do will have to be on the basis of losing this rate and going to a Standard Variable Rate. This will have an effect on your repayments for the rest of the life of your mortgage.

I also caution against rolling up short-term debt into your mortgage. While you will be paying a low interest rate, you will be paying this rate for the rest of the lifetime of the mortgage. Even at current SVRs, you will pay the same amount in interest that you will pay in repayment, so you would end up paying 80k to roll-in this debt of 40k.

You are carrying too much credit card debt. What interest rate are you paying on this? 

Added to your personal loans, you are carrying a years annual after-tax income in short-term debt. This is way too much (despite your low mortgage). You need to pay them off before you think of doing anything else. Interest rates will not stay at 1% forever, indeed, if there is a recovery in Europe next year, they will start to rise, whatever the state of the Irish economy.

You have 20k in college fees for your daughter coming up in two years. How do you propose to pay for this?

You also have no pension. Given the level of earnings of your partner, they are not going to have a large pension. You are both going to experience a severe drop in your standard of living when you retire unless you start saving.

You spend a couple of weeks in the US each year and would like to spend a few months each year when you retire. You intend, by the sound of your plan, to spend those few months in the one place? Or will you travel around? What's the cost of hotel/house/condo rental? How many nights a year will the cost of your additional US mortgage and property taxes (property taxes are steep in the US) get you? How much will the cost of maintenance of your property be?

So, in a shorter response to your question than the long-windedness above, yes.


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## Mommah (8 Jun 2009)

*Re: Am I mad to want this - I know I am mad to be paying what we are paying at the mo*

In short...I think you would be mad to do it.

You are carrying alot of debt on a modest income.
That debt came from somewhere...ie you spent that money on something...therefore it is a product of your lifestyle...therefore you seem to be spending more than you earn.

Considering the age of your kids etc, you have hardly any savings.
A minimum would be enough to live on for 6 months if you both lost your jobs.

Yes the housing market is very deflated in the US.
It could improve but the dollar could weaken and you could loose any upside.

So my advice is to save...go to the states regularly and rent a nice house, that you don't have to care for, paint or furnish...much cheaper.


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## anniemac (8 Jun 2009)

*Re: Am I mad to want this - I know I am mad to be paying what we are paying at the mo*

Yes I know totally what you mean and on the debt side of things, our daughter competed     in show jumping and we built stables and a practice arena along with my initial set up costs when stepping away from employment, so yes we spent a lot and not wisely, but we now have a home of great value [even in current climate - value May 09] and the priority being getting these loans into something more realistic. 
re:US home, we spend over 1000 per year on accom and our son pays about 800 per year at the same place so looking at over 15 years we would have something to show for our spending but i know saving is what we need to be doing and that the road we will take, many thanks to both posters, really appreciate your time!


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## anniemac (8 Jun 2009)

*Re: Am I mad to want this - I know I am mad to be paying what we are paying at the mo*

When we go to bank for finance we wont be touching our current mortgage but I know the bank will be looking at our home as security cant think there is any other way for our loans etc, but no we wont be touching our current mortgage. 
re: daughters collage fees- savings being added to and will sell off livestock and that is the base for her fees - modest prices out there now to for pony's/horses but we have a buyer in place for end of year lot less than we would have got 18months ago but sure that is the way of the world now.


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## pc7 (8 Jun 2009)

*Re: Am I mad to want this - I know I am mad to be paying what we are paying at the mo*

Yes you are mad.  You spend 1800 between you and your son on accommodation a year, to purchase a house and the hidden costs (furnishing/maintenance/ insurance especially if in a hurricane area like florida) it is not a sound investment to be honest. Work on your debts and clearing same over the next 5 years and then look at it.  With so much surplas accommodation in the US rates will be dropping so the 1800 you pay a year now may drop significantly


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## z109 (8 Jun 2009)

*Re: Am I mad to want this - I know I am mad to be paying what we are paying at the mo*

So you spend 1800 USD a year when visiting?

Over 15 years that is 27k USD. It sounds a lot. Until you consider you will pay at least that much in property tax (for a house or apartment). If you buy an apartment, you will also pay at least that much for management fees. 

You are therefore betting on gains in the price of the property you will be buying to make any money. What sort of price range are you looking at in the US?


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## anniemac (8 Jun 2009)

*Re: Am I mad to want this - I know I am mad to be paying what we are paying at the mo*

The property is a two bedroom apartment in a really sound area of Orlando the asking price is $89 thousand dollars[relater thinks an offer of 65-69 would lift it as it is currently bank owned]  it is in a short term rental area the same property was costing near $250,000 two years ago. i know what you are both saying about the huge amount of property in the area being vacant and the up-keep and costs for taxes and HOA fees, its totally the wrong time for us, I know! but taking in minimal rental of July and August, easter week and Halloween would cover the mortgage and taxes, HOA fees, I do know the area very well lived and worked there for 10 years so know the areas that have been built for the tourism market - also thought of long term rental on property 850 a month and let it sit for 5 years!


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