AIB negative equity mover mortgages

D

dylan123

Registered User
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2
Hi,

i wonder do any of you have advice for my situation.

i bought my ppr in 2007. I always paid my mortgage but due to pay cuts i decided to move location when i secured a new job with better pay in 2013. I have let my ppr since then. Mortgage is 1.1% tracker rate with,aib. 22 yrs left, 193k left to pay. Monthly payment is 840 and am only getting 500 a month rent.

I've no pension plan and had thought it best to keep my original ppr and try to buy a,second home where i now work as i see myself staying here for the foreseeable future and thought i should try and keep my original ppr for retirement (30 years away :-().

My salary is 65k. Am,single and no dependents. The problem i am,having is that i approached ptsb, boi, kbc and ulster bank and only one will potentially give me 150k for the second property but,there is nothing really out there in my city for that price, plus the market here seems to be moving fast. Its disheartening to learn that even though I've always paid my mortgage and moved because i had to better my financial position that i am,struggling to get approval for a,second home and also have to pay tax on the rental income (never envisaged myself or wanted,to,be a,landlord).

i am,now considering whether i should avail of aibs negative equity mortgage and sell my original ppr and carry the loss with me. I would probably get 150k for my ppr. So would have to carry the 40k loss with me. Im worried that if i approach aib that i may lose my tracker immediately given that i have,let out,my original,ppr. I have 15k in savings.

any thoughts?
 
Last edited by a moderator:
Why do you want to buy a second home?

You have a mortgage of €193k on a salary of €65k - that is three times income. That is enough borrowing.

You have a property worth €150k - so you have a big enough exposure to property.

Forget about using property as a substitute for your pension. It's a terrible idea. Very risky and not very tax efficient. Contributing to a pension is much more tax efficient and much less risky. However, I don't think you should start a pension until you actually own the house you are living in.
 
dylan123 said:
Mortgage is 1.1% tracker rate with,aib. 22 yrs left, 193k left to pay. Monthly payment is 840 and am only getting 500 a month rent.
Click to expand...

Your annual payments are €10,000. Of this, around €2,000 is interest and €8,000 is capital.

So, this is a very profitable investment. €4,000 a year of the rent is actually paying down the capital.

You will have paid down the negative equity in 5 years, assuming house prices don't change.

Brendan
 
dylan123 said:
i am,now considering whether i should avail of aibs negative equity mortgage and sell my original ppr and carry the loss with me.
Click to expand...

This would be the ideal solution for you.

Will you qualify for an AIB NE mortgage for the amount you require?

http://www.askaboutmoney.com/threads/summary-of-aib-ebs-haven-tracker-mover-product.187831/

If you buy a house for €200k, you will need a mortgage of €240k less your €15k deposit or around €225k. That is 3.5 times your salary. But given that €190k will be at 2%, it would be doable.

They require a deposit of 8% of the purchase price. So if you buy a house for €200k, you will need €16k. You have €15k, so you could buy a house around €200k at a struggle.



Brendan
 
thanks for the,advice. Much appreciated.
 
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