# 80% finance investment mortgage



## barryl (24 Aug 2006)

Hi there
I have just bought a property using Ics 80%ltv.I was impressed how little info. they needed, they were just interested in the property rent, and didnt require income details which suited me as I am self employed.What I want to know is,is it possible to get 85% or higher ltv under the same lending criteria, and what lender or broker deal with me.

                                                         thanks 
                                                             Barry


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## liteweight (25 Aug 2006)

*Re: 80% finance investment mortgage(question)*

No, you did well to get 80%!


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## barryl (28 Aug 2006)

*Re: 80% finance investment mortgage(question)*

Ok, Many Thanks, Barry


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## dam099 (28 Aug 2006)

*Re: 80% finance investment mortgage(question)*



barryl said:


> Hi there
> I was impressed how little info. they needed, they were just interested in the property rent, and didnt require income details which suited me as I am self employed.


 
I don't think its impressive at all that banks are prepared to give out large mortgages on very little information. While I accept the rent is the main factor by which an investment property should be judged, there is always the possibility of vacant periods and other income will factor into how well placed a borrower will be to cover the shortfall during such a period from their own resources.


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## liteweight (28 Aug 2006)

*Re: 80% finance investment mortgage(question)*

Damo99 - Of course everything you say is true, but the banks are lending to adults and are not there to 'Mother' an investor. At what point does one draw the line between what should be asked and what could be considered obstructive/intrusive?


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## barryl (28 Aug 2006)

*Re: 80% finance investment mortgage(question)*

These 80/20 Deals From Ics Are For Investors With 4+ Investment Properties.the Criteria Used By The Bank Assumes Your Income Can Cover Voids Etc, I Think They Are More Interested In Net Worth And Debt To Equity Ratios. From An Investment Point Of View I Want To Lessen My Risk By Using Less Of My Own Cash,thanks For All Your Coments So Far,
                                          Barry


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## liteweight (28 Aug 2006)

*Re: 80% finance investment mortgage(question)*



barryl said:


> These 80/20 Deals From Ics Are For Investors With 4+ Investment Properties.the Criteria Used By The Bank Assumes Your Income Can Cover Voids Etc, I Think They Are More Interested In Net Worth And Debt To Equity Ratios. From An Investment Point Of View I Want To Lessen My Risk By Using Less Of My Own Cash,thanks For All Your Coments So Far,
> Barry



That's an entirely different situation! Have you asked ICS if they'll up the amount? In general AFAIK lenders usually give 75%...80% depending on net worth. I don't really understand what you mean 'lessen my risk by using less of my own cash'?? If it all comes tumbling down everything goes anyway. Unless you mean that you'd have a better cash flow situation in case of voids etc.?


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## barryl (28 Aug 2006)

*Re: 80% finance investment mortgage(question)*

Yes,if The Deal Went Wrong,the Bank Will Take The Investment Back And Sell It,if This Does Happen Your 20% Is Lost,however If Your Risk Is 10% And The Bank Lend 90% You Will Lose Less


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## tosullivan (28 Aug 2006)

I've been able to get 85% LTV on my last 2 investment properties


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## liteweight (28 Aug 2006)

Where?? Any special criteria??


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## NorfBank (28 Aug 2006)

ICS deal is 80% MAXIMUM LTV on 3 or more investment properties.


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## dubinamerica (28 Aug 2006)

What lenders consider lending for two properties based solely on rental income (and not on salary etc) ? Any info appreciated.


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## barryl (28 Aug 2006)

Yes,which Bank And What Are The Rates, And Is "interest Only"in The Deal, Barry


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## MOB (28 Aug 2006)

"Yes,if The Deal Went Wrong,the Bank Will Take The Investment Back And Sell It,if This Does Happen Your 20% Is Lost,however If Your Risk Is 10% And The Bank Lend 90% You Will Lose Less"

Hi all,
I have nothing to add to the original query, but the above is untrue and I thought it no harm to flag it in case anybody was misled into making bad investment choices.

Non-recourse lending (where the bank has no comeback against you if there is a shortfall on the sale of the security) is common in some jurisdictions, but is not normal in Ireland.  In this country, if the bank are left with a shortfall, they will pursue you for it.

At the time of the last price crash in the UK, 'debt advice agencies' sprung up and frequently advised people to hand over the keys to the bank\building society.  Some of those people are now being pursued for the 'negative equity' shortfall- with interest -which arose when the banks sold up (the 'advice agencies' being long since gone of course).

The only people who can afford to be in default on loans are the very poor and the very, very rich.


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## liteweight (28 Aug 2006)

I assumed that if the bank repossessed and sold the property that they took what was owed plus expenses and the rest went to the original owner. Is this correct??


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## ClubMan (28 Aug 2006)

I don't think so - if the borrower defaults then the property can be repossessed in full by the lender as far as I know. If the property then sells for twice what's owed then the lender keeps the lot as far as I know.


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## NorfBank (28 Aug 2006)

dublinamerica,
all lenders will lend based solely on rental income, they differ on how much they will lend and the maximum LTV they will allow.
Bank of Scotland are the most generous lender using rental income alone but will only lend up to 75% of the property price. PTSB, IIB, EBS will lend up to 90% of the property value but will not lend as much as BOS based on the rental income alone.
Hope this makes sense.

PS: BOS allow full rental income, PTSB only allow a certian percentage of it to allow for vacant periods etc.
As a professional investor, no lender comes close to ICS, they know this hence the cap their lending at MAXIMUM 80% LTV.


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## liteweight (28 Aug 2006)

ClubMan said:


> I don't think so - if the borrower defaults then the property can be repossessed in full by the lender as far as I know. If the property then sells for twice what's owed then the lender keeps the lot as far as I know.



I better look into that one!   Not intending to default but that really seems unfair!


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## barryl (28 Aug 2006)

yes ,but what if the property is in a ltd


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## tosullivan (28 Aug 2006)

I got both loans from AIB.  One was for a buy-2-let and the 2nd is a holiday home which is not being rented.  I'm not sure whether I have over €400k equity in my own private home makes a difference but I have both properties on interest only for the time being.

I plan to sell the buy-2-let next year and the equity built up on that to clear a lot of the mortgage on the holiday home and then go to capital & interest repayments on the holiday home.


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## ClubMan (28 Aug 2006)

liteweight said:


> I better look into that one!   Not intending to default but that really seems unfair!


I presume that the terms & conditions of the loan agreement should clarify matters.


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## Maine (28 Aug 2006)

The banks want the cash back not the keys. They will take the keys if they have to and then pursue against other assets for full recovery. If they have to take the keys they will ramp up the charges and interest rates and pursue against other assets inlcuding PPRs / shares etc. Add in legal fees dealing with their massive legal teams and it will add up.

There is far too much sentiment among some investors of " I will just hand back the keys" - the banks will always get their money back hence they can take more risk with high net worth investors. 

Only totally non recourse will save investors and I would think there is little of that out there.

I would be surprised if being a LTD is much protection - they usually can get behind those


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## Maine (28 Aug 2006)

MOB said:


> "At the time of the last price crash in the UK, 'debt advice agencies' sprung up and frequently advised people to hand over the keys to the bank\building society. Some of those people are now being pursued for the 'negative equity' shortfall- with interest -which arose when the banks sold up (the 'advice agencies' being long since gone of course).
> 
> Correct 15 years after the UK crash the UK banks are coming back to people who handed the keys back and are now looking for the balance that was not recovered at the time from the sale of their property.
> 
> Typically this is people who have since bought a PPR and now have some equity in it ..........that the bank now want to get their hands on.  I think they continue to add charges and interest to the unrecovered balance.


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## liteweight (28 Aug 2006)

I would never consider just handing back the keys as an option! I really don't undertand why this phrase is bandied about so much.

Surely anyone can see when they might be heading into financial difficulty. I'd much rather be pro-active, sell up and keep my credit rating clear for better times ahead!!


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## tosullivan (28 Aug 2006)

Maine said:


> The banks want the cash back not the keys.


and to add to that, they just want the interest as a *MINIMUM*. When I took out my recent mortgage and asked for various options on 80% Interest/20% capital etc. repayments, the bank just said and I quote "Look, all we are interested in is getting the interest. If you make the capital repayments then its in your favour. Why don't you just take out the interest only option and if you have any left over at the end of the month, lodge it, whether it be €1 or €1000."


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## dubinamerica (28 Aug 2006)

So if I approached say BoS with two buy-to-let properties they would look at rental alone? I'd like to avoid having my salary and PPR brought into the equation. Originally purchased a second buy-to-let well over a yr ago and it is not complete but our circumstances have changed. below 75% ( actually 50% or less) LTV would be fine for us as long as I had the option of going interest only.
Any idea of BoS (or other lender) would look at providing mortgage for a property that has already drawn down some money from EBS but will not be completed for a few weeks? 
Also - is it best to go through a broker for this ? 
ICS was mentioned as best here  - do they have the most competitive rate for buy-to lets?


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## Cityliving (30 Aug 2006)

ClubMan said:


> I don't think so - if the borrower defaults then the property can be repossessed in full by the lender as far as I know. If the property then sells for twice what's owed then the lender keeps the lot as far as I know.


 

When a bank repossess the property it is sold and any excess is returned to the customer less any and all expenses incurred by the bank/lending institution.


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## euroDilbert (30 Aug 2006)

liteweight said:


> I would never consider just handing back the keys as an option! I really don't undertand why this phrase is bandied about so much.
> 
> Surely anyone can see when they might be heading into financial difficulty. I'd much rather be pro-active, sell up and keep my credit rating clear for better times ahead!!


 
I lived in the UK during one of the boom/bust phases.

The reason people "handed their keys back" were :

(1) Their property wouldn't sell or
(2) The property would only sell at a significant amount less than the original loan (negative equity).

This _may_ happen in the Irish property market at some stage (huge int rate increases, oil crisis etc.).

My own property was on the market for 6 months - no sale. Took it off for 6 months. Then sold it after another 3 - luckily for slightly more than my loan (having owned it for 7 years).


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