To buy now or later

OK ,currently live in a nice bungalow about half hour from Galway city, location was fine for a time but my fiancé and I hope to sell and relocate to Limerick city within three years, for reasons both family and career related, it just happens to suit my other half better, she worked in Limerick for years prior to us meeting.

The house in Galway is worth between 200k and 230k roughly, we hope to spend between 260 k and 300 k on a new house in castletroy

We are exploring the idea of getting a mortgage now but with the perhaps unusual decision of delaying selling the house in Galway for about two years, reasons are slightly complicated but house is mortgage free.

For a house costing 280 k, we would need a mortgage of 180 k, was wondering if the lender would view this as a BTL loan seeing as we already own a home ?

Just to add we would not intend to let out a new house, the logic behind the proposal is Limerick appears to be rising steadily and rural Galway has hit its ceiling

Rate with ulster Bank is 2.3% for the first two years, obviously if a crash happened, both properties drop in value where as mortgage stays the same.

We sort of feel that even we couldn't sell Galway following a crash, the rent would still cover the 25 year 180 k mortgage ?

There are a number of other factors that would influence my decision here.

Age/Net Worth/Asset Allocation/ Kids/Salary/ Ease of getting similar salary in Limerick.

Without knowing any of the above my advice would be to sell the Galway house and have no mortgage on the house in Limerick.

David1234 said:

There are a number of other factors that would influence my decision here.

Age/Net Worth/Asset Allocation/ Kids/Salary/ Ease of getting similar salary in Limerick.

Without knowing any of the above my advice would be to sell the Galway house and have no mortgage on the house in Limerick.

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Well a mortgage of minimum 50 k will be required even we sold the Galway house tomorrow

I'm 41
She's 38

She works in retail for the same company since 2005 and earns 29 k per annum

I earn circa 50 k per annum but only 32 k of that is from my day job, I've assets worth about 500 k not including the family home, cash and equities currently 150k

No debt currently

But you have 100k in cash to buy the Limerick house so this plus the 200k+ from the Galway house would leave you mortgage free in Limerick, so there is not a minimum of 50k mortgage needed. Or have I misunderstood?

gravitygirl said:

But you have 100k in cash to buy the Limerick house so this plus the 200k+ from the Galway house would leave you mortgage free in Limerick, so there is not a minimum of 50k mortgage needed. Or have I misunderstood?

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It doesn't suit us to move for two years but we are considering the possibility of buying now and selling in summer 2021

I guess it's really a question of whether anticipating the market is always folly, where we live now has plenty of rental demand so worst case scenario and the market fell hard, we should see enough rent to cover the mortgage on the new house, if the market turns south, it will probably be harder to borrow anyway

I really don't think you've thought this one through. Nowhere in that opening post do I see you mention the most important thing; you're going to have to change your user name here!

It's a difficult one, without going down a rabbit hole on house price speculation, and looking at your total exposure to property.

On a practical level, there's a lot of emotions attached to buying a home. Can you really buy a house now that you won't live in for 2 years?

RedOnion said:

I really don't think you've thought this one through. Nowhere in that opening post do I see you mention the most important thing; you're going to have to change your user name here!

It's a difficult one, without going down a rabbit hole on house price speculation, and looking at your total exposure to property.

On a practical level, there's a lot of emotions attached to buying a home. Can you really buy a house now that you won't live in for 2 years?

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OK, so you think you know my identity, great, fantastic

I only wish I had bought a new house in Limerick eighteen months ago, I had the cash and same houses are 50k more expensive today, I'd have no problem buying today and not moving in for two years

galway_blow_in said:

OK, so you think you know my identity, great, fantastic

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I think he was referring to the fact that you'll have to change your 'Galway' name to one that refers to Limerick when you move. He wasn't talking about having identified you.

Limerick_blow_in

galway_blow_in said:

I only wish I had bought a new house in Limerick eighteen months ago, I had the cash and same houses are 50k more expensive today, I'd have no problem buying today and not moving in for two years

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Hindsight is great. If you can work the numbers, I'd see nothing wrong buying the house in Limerick now. You'll have two years to get it right. But I'd hold off until Brexit is sorted one way or the other ... to see how the Irish economy reacts to the final outcome.

galway_blow_in said:

OK, so you think you know my identity, great, fantastic

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Nope - I obviously missed my mark with that joke.

I’m unsure why you would want another house in a different county when you aren’t intending on moving for at least 2 years. Would you leave the limerick home idle for that time or rent it out?

A lot can happen in the next 2 years so if it was me I would just sit tight and wait until I was ready to move. You have a good net worth for your salaries so no point in unnecessarily gambling on the property market

I don't know how often we have to say this, but we should not have to say it to a Frequent Poster.

We don't allow speculation about house prices on Askaboutmoney.

Brendan