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You have a combined income of €51,000 (including rental income) and a total mortgage of €600,000.
That is completely unsustainable. It is only because you have an interest only mortgage that things haven't fallen apart before this.
Sorry to be the bearer of bad news, but you need advice on your overall financial situation not just getting more space.
Negative equity on this property is 70k per your figures. Your expectation is that this will disappear over the next 12/13 years. I.e property inflates at c3% pa. Obviously a fingers crossed position but not totally unrealistic.The term on rental is 12/13 years - Its is in negative equity at present, but should be able to pay itself off at the end of mortgage term.
As I mentioned previously you are currently relying on MARP in respect of this reduced monthly payment. If you leave the property you will no longer be in a position to avail of MARP and the bank should start demanding the full P&I repayment. This may be higher than the €1,350 mentioned as you will need to catch up on the element of previously reduced repayments.I did not fool the banks with the monthly spending. Everything .. all bills are paid through banks. I squeeze (entertainment, grocery and petrol) - we don't really entertain, i am good with grocery shopping and we don't use car as much as we used to and save on diesel. My husband sometimes a bonus of approx 200euros every 6 weeks, that goes in the savings. Banks can see that income coming in through Payslips/Bank statements but I didn't include in my total monthly/yearly income when I completed the financial forms. I've been submitting these for last few years and they've never asked me about this, but the info. about this little extra income is with them!
My 6 year won't be leaving home, my 12 year old will ( I have 3 children that's the main reason with the space in the apartment ), we could help him a little to rent a room nearby in few years time.
I had another think on this Emma. What would happen I wonder if you left the house, went and rented somewhere suitable and told the bank to take the two NE properties. Have you discussed this with a financial advisor. Basically go bust/insolvent/bankrupt.
That is an interesting suggestion Bronte
The income then would be
Salary One 1666
Salary Two 1416
Child allowance 420
Total 3,502
Rent on the property they want €2,000
Left for a family of 5 to live on €1,502 a month. Not easy and exposed to the vagaries of the rental market. At least now they own their home even if it is too small for their needs.
Bronte,
Well, I was thinking (hoping) that we won't have to take extreme measures of bankruptcy/insolvency. This way we lose both properties almost straight away.
Like I said, there is a chance of me to work full time, I will need to juggle the childminder fees, .. at the end of say 5 years, I shouldn't have as much childminder expenses. We are looking for a long-term tenancy with agreed fixed rent for 3/4 years. Once we know exactly how much our rental expenses are, we can work our household budget around that.
Our income, hopefully will increase a little in next 4/5 years not much, but still every little helps in our situation, we maybe able to pay off 1 mortgage or near enough to it before retirement. We are both 40.. still good 25 years left for us to earn !
All this I understand is in "hoping" and "wishing" but still I don't think its an impossible situation. Optimism is my motto for this year!!
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