Help gratefully received! :)!

michelle2008

General opinion is house prices in NI have further to fall. You would be taking a really big risk. I agree - sit tight - overpay - take advantage if current low interest rates.

JimmyTheWig

Lisa1978 wrote: »

Guess reading this back we should stay were we are and instead overpay £1k/month off the mortgage?

I would say this would be much, much safer than trying to let out the apartment at a loss and take on a third mortgaged property.

But I'd also be tempted by this plan...

Lisa1978 wrote: »

Yes, if we sold the apartment, we'd pay the £20k NE, have £5k left for fees etc and we could rent for one year while we save £10-15k. I am fortunate in that we can save approx £1200-£1500/month, therefore it wouldn't take us long to save another deposit and at the end of the day we would have a larger property.

Would mean that you'd only have one property in negative equity rather than two.
If you did this, would you rent somewhere bigger/nicer/better than the apartment? (Is this part of the plan?)
How would the rent compare to the mortgage on the apartment?

Lisa1978

JimmyTheWig wrote: »

I would say this would be much, much safer than trying to let out the apartment at a loss and take on a third mortgaged property.

But I'd also be tempted by this plan...

Would mean that you'd only have one property in negative equity rather than two.
If you did this, would you rent somewhere bigger/nicer/better than the apartment? (Is this part of the plan?)
How would the rent compare to the mortgage on the apartment?

We are looking somewhere bigger to buy (esp while house prices low) and we are trying for a baby, therefore we'd prefer a larger property. The mortgage at the mo is £595 plus fees/rates = £700/mth. In the area we are looking to move too we can rent a 3bedroom house for £500/month, therefore there is a monthly saving there. Any more ideas? Thanks :)

JimmyTheWig

Lisa1978 wrote: »

The mortgage at the mo is £595

How much of that is repaying capital and how much of that is interest? I'm guessing you've got a long time left on your mortgage so is mainly interest.
If you don't know the answer, then what is your outstanding mortgage balance and what is the interest rate currently?

[Also, what do you think will happen to property prices in your area in the coming few years?]

Fuzzyness

DannyboyMidlands wrote: »

No, keep going. You seem to have a knack for property speculation.

arrrrrffffff.

Catblue

If you want to have a baby then you really need to take stock properly. Your income will go down (even if temporarily on maternity leave) and your outgoings will go up. If you do intend to go back to work then childcare costs are significant. If you do not intend to go back to work then rather than supporting two people on two incomes then you will be supporting three people on one income. Pretty scary, particularly if you already have two properties in negative equity.

I'd sell the apartment, pay off the NE with your savings, and then rent another house in the meantime. And start saving like mad again.

quintwins

i would say stay and overpay, i would leave your rental property to bundle along as it is and put your apartment into the mse overpayment cal, if you can overpay by £1000 a month you'll be amaved how quicklt it will go down.

JimmyTheWig

quintwins wrote: »

i would say stay and overpay

Even though it looks like renting would be less than the interest on their mortgage + current fees?

quintwins

JimmyTheWig wrote: »

Even though it looks like renting would be less than the interest on their mortgage + current fees?

It would barely be cheaper and then your money would be going to pay someone elses mortgage then taking into account the neg aquity it may not be worth the saving in the long run i would sit tight, it's worth remeber that babys don't need alot of space, if you can fit a cot in your room thats all you will really need for the first year, clothes and toys can be slotted in where ever you can, you can even get highchairs that attact to tables to gave space.

If they paid £45k off there current house over 3 years, they would be in a much better position.

If the rental house is in a popular area and requires little imput it will eventually pay it'self off (i disn't see any mention of an interest only mortgage), but just having this house would make me inclined to keep a decent buffer and imo £5 would not be enough, because if your tentants wreck it the quicker you can get it fixed the quicker someone else can move in, without having to wait for court proceedings ect.

saverbuyer

You've done very well to have 25k of savings having had none as stated in your posting in April. I think you estimate was £3,500 by the end of the year.

https://forums.moneysavingexpert.com/discussion/comment/52583737#Comment_52583737

If I were you I would forget the property speculation. Prices in NI have dropped 7% in the first three months of the year. I would actually be looking at reducing your risk to futher falls and getting rid of the flat or the house. You are massively exposed with this leverage. If you don't address the mortgage debt you could be in this for a very very long time.

I also think you will find it had getting a bank to advance you a further 220k. I hope it's not one of the state owned ones. This type of reckless lending got us to where we are.