Hoping to Move - Options?

Financial Details

Mortgage -

Mortgage Interest Rate – Tracker =.75% with AIB

Current Monthly Amount - €600

Borrowed €227,700 Feb 2007 (over paid for a number of years)

Outstanding €175,000

Current Value – Approx. €155,000 - €160,000


Incomings & Outgoings

Salary 1 - €41k

Salary 2 - €27k (part time)

Monthly Take Home - €3925

Children – 2, no child care costs

Savings – €60k


What are our options?

1.

• Keep our apartment and rent out. Rents stable in the area and would secure approx. €1100 per montn
  
  
• Hoping to buy a new family home for €300k, using our €60k as a deposit. Is this an option? New mortgage would be €240k.
  

2.

• Negative equity/tracker mover mortgage. Sell apartment and take negative equity approx. €15k with us to new property and say good bye to apartment?
  
  
  

Hi Laura

On the face of it either option would appear to be viable.

As a rental, your apartment would produce a decent gross yield and your financing rate is obviously very reasonable. Your proposed new PDH mortgage would also appear to fall within the Central Bank's 3.5 LTI/80% LTV limits.

However, as things stand, I don't think you really have a sufficient cash cushion to retain the apartment as a rental. One bad tenant, or even a run of significant maintenance issues, would put your finances under huge strain.

If I was in your position, I would opt for the tracker mover mortgage option and would let the apartment go.

Not everybody is cut out to be a landlord. You need to think long and hard about this.

Like Sarenco I'd go for option 2.