I want to get rid of an investment in N.E. and sell my home in positive equity.

I would appreciate some financial advise on what we should do with an investment property. Details of our financial situation are:

Age: 43
Spouse’s/Partner's age: 43

Annual gross income from employment or profession: 53,500
Annual gross income of spouse: 35,000~ self employed


Type of employment: civil servant and self employed
saving 800pm

Rough estimate of value of home: 165,000
Amount outstanding on your mortgage: 142,600
What interest rate are you paying? variable 4.25% 19 years left, 900pm

Other borrowings – car loans/personal loans husband has small remaining car loan approx 1,500 to finish paying

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: approx 35k in savings

Do you have a pension scheme? yes both have

Do you own any investment or other property? YES,
Value - 125,000, outstanding = 165,000, 5.15% 14 years left (now paying interest and part capital 780pm) was originally interest only. Rental income = 650.

Ages of children: 9, 7 , 3

Life insurance: yes

Of note parents have offered up to 25k to help and We also received letter from bank recently that our home mortgage is part of the central bank tracker review.
So ideally we would like to sell the investment property, speaking to autioneers the current value is unlikely to change so are we better to just cut our losses now in case the value drops and we owe even more!. Just to add the strain and worry of this hanging over us is unbearable. The overall plan is to sell our home but will have to get rid of investment mortgage to do this and re-locate and just put the nightmare of being a landlord behind us as it hasn't been a easy ride.

Any advice welcome.

ash693 said:

The overall plan is to sell our home

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Is the overall plan to sell our home and buy another?

The lender will require you to have a deposit of 20% of the value of the property.

So let's say, you want to buy a house costing €250k - you will need a €50k deposit.

Equity in current home: €23,000
Savings : €35k
Deposit available: €60k

If you use your savings to pay down the negative equity on your investment, you might not be able to move .


Which lender are you with? If you are with one of the active lenders and if you have a tracker mortgage, you will be able to transfer that tracker to a new home, subject to certain limits.

So, it seems to me that you should not sell the buy to let yet and you should probably not do anything until you get news on the tracker.

If you sell your home now, and then you find you were entitled to a tracker, they may not compensate you properly.

Of course, if you get your tracker back, you will also get a refund, which could be substantial.


Brendan

I see from this post that you have restructured your investment property mortgage with KBC.

That really does not make much sense when you have cash sitting in the bank.

Your credit record will note that you have a restructured mortgage.

You should talk to KBC and see if you can get rid of that note by resuming full repayments and paying off any balance which would have been due.

Also, check your ICB record.

Brendan

Thanks for your reply Brendan.

Yes the plan is the sell our home and move elsewhere this year preferable.
If we do sell the Investment we will have to use all our savings and then won't have the funds to move.

With KBC for both mortgages. Tracker was only on our main home not the investment so if we sold the investment would it affect getting the tracker back and possible compensation on our own home?

News on the tracker could be a long way off

Point noted Brendan about the full repayments....but if paying the investment at full repayments the savings would be a lot less and we will never have the money for a deposit to move.

But if you are in a rescheduled agreement, it is unlikely that any lender will give you the money either.

Brendan

would that be the case even if the rescheduled agreement is gone when the property is sold?

Yes. Your ICB record remains for 5 years.

The earlier you bring it up to date, the better.