trying to trade up

S

swimmer

Guest
Hi there
Just wondered what people think.
WE have a mortgage of 250K and house value is approx 400k.
We are thinking about trading up to a house costing 500k
As it may take tooo long to sell our own we may look at remortgaging and renting our current house.
This would leave us with an investment mortgage of 320k costing 1400 interest only. Rent may be about 1500pm
But leaves us with a big mortgage of 440+ on our "new " home . I sthis too much to take on - both in our late 30's

Any opinions welcomed
thanks
swimmer
 
swimmer said:
This would leave us with an investment mortgage of 320k costing 1400 interest only. Rent may be about 1500pm
Click to expand...
Are you aware of the tax and other implications of doing this? Have you read this thread?

Sell home or keep as an investment?
But leaves us with a big mortgage of 440+ on our "new " home . I sthis too much to take on - both in our late 30's
Click to expand...
You'd probably need to post details of your overall financial situation for people to comment - e.g. gross/net income, other debts/savings/investments etc.
 
Thanks will check that thread out - new to the site so only finding my way around!
Swimmer
 
Is there that much of a difference between a 400k property and a 500k one to warrant increasing you monthly out goings to that extent? Considering you'll have to cover months where theres no rent and you'll have the expense of maintaining two properties.
An alternative would be to extend or improve your existing property. It would depend on why you want to move vs the cost.
 
I'm just not dubious of a 4.5% yield based on current market conditions. Plenty of areas in Dublin are currently achieving this figure, I'm no so sure of elsewhere though.

Camry is correct in the view that the OP will need to be able to support the repayments on a €690k mortgage for a number of months at least even allowing for a strong rental market and that this should be the OPs primary concern
 
Put your own on the market first and see what response you get, seems that becoming a landlord is second choice to go for you so I wouldn't go down that particular route especially if you will be cutting it tight in a bouyant rental market.
 
Hi all
thanks for all your comments. HAve been trying to get through all the suggestions!
The rent is similar to others in the area - we are close to Dublin city centre so commuting not an issue for potential renters.
We are thinking of just renting it short -term , allowing us to buy the other house (which is an area which we have always liked) and then not be landed with the almost 700k mortgage as pointed out for too long.
Income wise on paper we have a joint income of 130,000 gross - but it still adds up to a large responsibility ..
Thanks again
swimmer
 
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