Hi All
I'd appreciate some help/advice on the following. Prior to meeting, my wife and I had both purchased properties to get on to the property ladder at the time.
I purchased a 3 bed semi in Dublin in 2005 for €400k and am a permanent full-time civil servant.
My wife purchase a 3 bed semi in Kildare in 2008 for €350k and is a self-employed IT contractor.
We got married earlier this year and decided to live in Dublin as it was closer to both workplaces. However both of us wish to move to Meath to be closer to family as we hope to start a family, it doesn't have to be immediate as we are prepared to stay put for a minimum of 6 years. Both houses are in negative equity. Thankfully both have Tracker mortgages.
Dublin 3 bed is now our Principle residence. The Kildare 3 bed is in a good rental area and the rent recieved each month matches the mortgage payment, approx €11k per year. We cancelled the TRS. (However, as the mortgage on this property is a low interest tracker we end up paying income tax of approx €3k per year so essentially the Kildare property is not covering the mortgage.)
Amount outstanding on Dublin 3 Bed is €295k with EBS. Current market value: €230.00. Made some lump payments over the years.
Amount outstanding on Kildare 3 Bed is €245k with AIB. Current market value: €190.00. Made some lump payments over the years.
We have approx €200k in savings between us and can save approx €30-35k per year.
We have no outstanding car loans, credit cards or other loans/expenses.
Neither mortgage has ever been in arrears nor have we ever missed a payment. However we do not wish to approach either lender as we are afraid that they will find some loophole that will allow them to take away the tracker mortgage on the rental house. We got a solicitor to read the original mortgage agreement of the Kildare house and it doesn't mention anything about the Tracker only applying once it is your PPR. We did cancel the TRS.
How will we manage to live in our ideal location with minimum investment loss?
Final option is to stay put and be bitter for the rest of my days
I'd appreciate any advice on the above. I'm sure there are plenty others in the same situation.
Slan
TS
I'd appreciate some help/advice on the following. Prior to meeting, my wife and I had both purchased properties to get on to the property ladder at the time.
I purchased a 3 bed semi in Dublin in 2005 for €400k and am a permanent full-time civil servant.
My wife purchase a 3 bed semi in Kildare in 2008 for €350k and is a self-employed IT contractor.
We got married earlier this year and decided to live in Dublin as it was closer to both workplaces. However both of us wish to move to Meath to be closer to family as we hope to start a family, it doesn't have to be immediate as we are prepared to stay put for a minimum of 6 years. Both houses are in negative equity. Thankfully both have Tracker mortgages.
Dublin 3 bed is now our Principle residence. The Kildare 3 bed is in a good rental area and the rent recieved each month matches the mortgage payment, approx €11k per year. We cancelled the TRS. (However, as the mortgage on this property is a low interest tracker we end up paying income tax of approx €3k per year so essentially the Kildare property is not covering the mortgage.)
Amount outstanding on Dublin 3 Bed is €295k with EBS. Current market value: €230.00. Made some lump payments over the years.
Amount outstanding on Kildare 3 Bed is €245k with AIB. Current market value: €190.00. Made some lump payments over the years.
We have approx €200k in savings between us and can save approx €30-35k per year.
We have no outstanding car loans, credit cards or other loans/expenses.
Neither mortgage has ever been in arrears nor have we ever missed a payment. However we do not wish to approach either lender as we are afraid that they will find some loophole that will allow them to take away the tracker mortgage on the rental house. We got a solicitor to read the original mortgage agreement of the Kildare house and it doesn't mention anything about the Tracker only applying once it is your PPR. We did cancel the TRS.
How will we manage to live in our ideal location with minimum investment loss?
- The best option that I can think of is that we go and buy a site with our savings in an area that we both wish to live as prices are reasonable at the moment. And continue to save for the next 5 years @35k per year. At least then our money isn't stuck in a bank should anything go seriously wrong in the banking sector. In 5 years we should have enough to build on the site. And rent out both properties in 5 years time and hold onto both properties until house prices improve.
- Do the same as last bullet point except - Hold onto current savings and add to them over the next 5 years and then purchase a House in the location that we want. The problem here is that the house type may not be ideal and the house prices may have recovered again in 5 years outside of our budget.
- Or go to the bank for a mortgage? I don't think the banks would give us a mortgage at the moment when only one of us is permanent and we both have negative equity mortgages. Do you think the banks would talk to us?
- Or should we sell both properties now and take a hit on the negative equity loss? Transfer the outstanding debts to a new mortgage? Though then we are back to square one with no assets? I don't like this option as we have tracker mortgages which are "cheap loans" at the moment and house prices are showing some glint of price recovery. We also have good savings and have good ability to save. Also maybe the banks will do a deal in a few years time and may pay to get us off the tracker mortgages?
Final option is to stay put and be bitter for the rest of my days
I'd appreciate any advice on the above. I'm sure there are plenty others in the same situation.
Slan
TS
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