Remortgaging, best option?

Hi All,

I bought a house last year worth 168,000. I sneakily borrowed the deposit which was 15,000 and another 15,000 to furnish the house. The plan was to get tenants in asap, but plans don't always work out as they should. The girlfriend has moved in and we're happy with the privacy.

The repayments are stretching me, if anything out of the blue arises I'm in trouble.

I'm in the process of remortgaging the house, which I don't mind doing as the 30,000 was spent on the house, and not on an extravagant holiday or car. This will bring my current home loan of 152,000 up to 180,000. But it will give a bit of leg room in my monthly budget with about an extra 300 euro. The application has been approved by EBS by the way.

Can someone tell me am I making the right move? I've been thinking about this since January and finally going ahead with it.


Thanks very much,
Kerryman.

Nothing wrong with this as far as I can see. Like you say this 30K (well 15 anyway) is, and should be, part of your home loan.

That's some amount of furniture for 15K.

But it's all hand made furniture

No seriously, I meant doing the house up, so the floors, kitchens, bathrooms would all be included in that.

Good to hear that it sounds sensible to someone though, thanks.

So it's 'finishing' as much as anything. Yeah, lump it in.

Have you crunched the numbers to understand how the total monthly repayments will differ after the remortgage/loan consolidation compared to before? Have you also crunched the numbers to estimate how much the top-up will cost if paid off over the full term of the mortgage compared to paying off the existing loans over the shorter terms that presumably apply?

My monthly budget will improve by 300 euro after the consolidation. But in the long term, if I don't accelerate my repayments in the future, the addition will cost me an extra 25,000 in interest over the full term of the mortgage which is 35 years. So I hope to get a grip on things this year by remortgaging, budgeting so that the extra money can be used to build up a cash reserve which I badly need and start on a pension. Then in the next year or so, increase my repayments so that I can minimise the huge amount of extra interest. That's the plan.

Kerryman said:

start on a pension.

Click to expand...

Are you sure that this should be a higher priority than reducing your outstanding debts (including mortgage) first?

I'm glad you aksed that. I will be 27 later this year, is it too early to be worrying about a pension. The company I work for have a good pension scheme, just feels like I'm missing out on that benefit. But I suppose it really makes sense to put everything (that I can afford) into the mortgage in the next few years. This will be my only outstanding debt, after the consolidation.

I know very little about any of the above but they always say the earlier you start a pension the less it costs you per month.