House sold - advice on what to do next ?

[shizuka]

Hello guys

I need some advice, hopefully you can give me some ideas.

Currently have a mortgage on apartment of 300k
Sold old house and left with about 150k after all clear.

No idea what to do with this.

Should I put all 150 in against mortgage ?
Keep some aside for a rainy day ?
Or look at diversifying and putting part of it into mortgage and rest into other deposits or investment ?

Any help or advise, greatly appreciated.

Cheers.

 

[ClubMan]

Currently have a mortgage on apartment of 300k

Is this your PPR or an investment? If it's an investment then it may make sense to leave the mortgage as it is (and maybe ven opt for interest only) in order to maximise the amount of interest that you can write off against rental income (Interest only mortgage).

Sold old house and left with about 150k after all clear.

Including taxes?

No idea what to do with this.

Should I put all 150 in against mortgage ?
Keep some aside for a rainy day ?
Or look at diversifying and putting part of it into mortgage and rest into other deposits or investment ?

You'd need to post more details about your overall situation such as any other debts/savings/investments, short/medium/long term goals, attitude to risk/volatility etc. In general it is prudent to create a well diversified portfolio but translating that into specific decisions is the hard part.

Use Karl Jeacle's mortgage calculator to estimate what you could save by reducing the mortgage.

 

[shizuka]

Cheers.

House was primary residence for 10 years, Put a deposit on new apartment, and put house up for sale.

Apartment is now primary residence, house was vacant and on market for months, but was not actually sold until a few months after I moved into apartment. Do not believe there are taxes owing on this, but can look into it.

Plan to live in apartment for at least five years so as to not pay clawback stamp duty. Then continue to live there, or rent it out and move elsewhere.

All debts, credit cards etc, cleared bar the mortgage of 300k

If work situation remains stable, can cover the cost of this mortgage as is.

Short term have put half (70k) into Rabo while I figure out what to do, and was planning on putting other half in against mortgage.
But dont know if this is the best way forward, will look at Karls calculator and check savings there.

Want to make the best use of the money while I have it, probably will not see the like again, unless there is another property boom in the future.

Medium term, I want to plan for a rainy day, i.e make sure im covered if there is a down turn in job market etc.

Long term I suppose financial stability and a long happy retirement.

So decisions I have to make I suppose, is how much I invest into property, i.e apartment. And how and what other areas I should look to invest the rest ?

Risk wise, im probably low to medium, happy putting a portion into higher risk/higher return fund/shares, but also want to ensure a large portion of it is secure into the future. so probably more low risk/medium returns if possible. No idea what category property falls into at the moment

 

[ClubMan]

Do not believe there are taxes owing on this, but can look into it.

If it was always your PPR, never rented out and sold within 12 months of vacating it then no CGT would be due. I just wan't sure from the original post.

Plan to live in apartment for at least five years so as to not pay clawback stamp duty.

The SD clawback only applies if you rent it out within 5 years of purchase as an owner occupier. Some people seem to assume that it applies even if it always your PPR but you sell it within the 5 years.

All debts, credit cards etc, cleared bar the mortgage of 300k

Might be worth reducing the mortgage so? See the calculator that I linked to estimate the potential savings.

If work situation remains stable, can cover the cost of this mortgage as is.

You mean repayments or something else?

Short term have put half (70k) into Rabo while I figure out what to do

Better to put €10K @ 5% gross CAR into Rabo and the rest at 4.3% gross CAR in Northern Rock since Rabo only pay 3.75% gross CAR on the balance over €10K.

Medium term, I want to plan for a rainy day, i.e make sure im covered if there is a down turn in job market etc.

Usually you only need to plan to have a few months emergency fund available on demand to cover you while you find a new job. And you may be entitled to Jobseeker's Benefit if out of work too.

Long term I suppose financial stability and a long happy retirement.

What pension cover do you have?

Have you considered getting independent, professional advice from an authorised advisor or good multi-agency intermediary who would be better placed to do a full fact find/financial review and recommend options to you?

 

[shizuka]

Cheers for the advice Clubman, much appreciated.

Just meant covering repayments there.

Re rainy day, possibly something like mortgage protection in case of redunancy, if such a thing is available, or just keeping an easily accessible fund more than likely.

Will look into Northern Rock. Cheers.

Pension, have the max allowable through a work PRSA pension.

Yup more and more its looking like I need to go and get independent financial advice. Did want to have a good idea of what I was talking about first though. Doing a lot of research myself, but does not seem to make way forward much clearer at the moment. So think I could be at my limit there.

 

[ClubMan]

Re rainy day, possibly something like mortgage protection in case of redunancy

Presumably you already have mortgage protection life assurance (to clear the mortgage if you die). Be careful with mortgage repayment protection insurance as they can often be expensive, bad value for money and pay out only in very specific circumstances (e.g. you cannot get any job - not just in your preferred sector) and for limited periods of time (cumulative). In some cases income protection or permanent health insiurance might be a better deal. You'd need to get professional advice.

Pension, have the max allowable through a work PRSA pension.

You are contributing your maximum age related tax relief percentage of income already?

 

[shizuka]

Will look at income protection as probably a better bet so, think Friends First seem good there, any others to look at

Pension, have the max allowable through a work PRSA pension

.

You are contributing your maximum age related tax relief percentage of income already?

Yes just up to that limit, while I can afford it anyways unless financial situation changes, does that make sense ?

 

[ClubMan]

Yes just up to that limit, while I can afford it anyways unless financial situation changes, does that make sense ?

Yes - if your other finances are in order and you can afford to maximise you pension contributions to avail of maximum tax/PRSI relief then it's not a bad idea to do so.