Mortgages and Overseas Properties

F

Fergus

Registered User
Messages
6
I have recently moved back to Ireland from Australia with my family and I'm trying to get a mortgage to renovate/extend a property that I have recently purchased. We have two other properties, one in Ireland, one in Australia both with mortgages.

The Aussie property is worth 540,000 aud with 300,000 aud remaining on the mortgage. Mortgage repayments are 1,000 aud per month, rents for 2,000 aud per month.

The Irish property is worth 300,000 eur with 140,000 eur remaining on the mortgage. Mortgage repayments are 590 per month and rents for a modest 850 per month with excellent long-term tenants.

I have purchased our family home outright, it is worth 225, 000 eur. I am now looking for a mortgage of approximately 200,000 eur to renovate it.

I thought after saving money whilst in Australia that my financial position was quite healthy but it appears that the bank does not agree and is poised to refuse my mortgage application on the basis of a worst case scenario view of our other mortgages.

Does any one have any advice on a way forward that does not involve selling either property?
 
Fergus,
There's no information given on what income you have to sustain the loans, how permanent your job is and what other outlays you have. Age, family, etc will all come into play as well.
 
Thanks noproblem. I am working full time on a permanent contract with 93,500 base salary, my wife is working part-time with approximately 25,000 salary. I am 38, wife is 40 and we have 2 kids, 4 years and 20 months. Other than the properties and mortgages mentioned we have no other loans/debts and we currently pay no rent. Other outgoings would just represent the usual domestic expenses.
 
That is bizzare, you're Aussie & existing Irish properties have a ton of equity in them & more than wash their face from the rents.
Your loan to cost on the new property is approx 50%. Where is the new family home?

Are you sure you didn't talk to one of the people who doesn't know how LTVs are calculated?
http://askaboutmoney.com/threads/48-of-people-cant-calculate-the-loan-to-value-of-a-mortgage.199398/

You could try get an indicative valuation from an estate agent for the new house pro forma for the improvements you intend to do.
That will be able to give them a guide on the "value".
However I note, investing €200k into a house in Leitrim isn't going to result in a dollar for dollar value increase.
 
Fergus said:
it appears that the bank does not agree and is poised to refuse my mortgage application
Click to expand...

Hi Fergus

You say "the bank". Have you approached only one lender? If so, which one?

It does seem odd that they would not give you €200k on a house which is already worth €225k. Even if it only increases the value to €325k, they would still have loads of equity and loads of Loan to Income cover.

I think you should be able to get the mortgage you want.

However, I am not sure why you are keeping the Aussie property? It doesn't really make sense for an Irish resident to hold onto a property in Australia, unless you think you might return. But if you might return, you shouldn't be spending €200k on improvements to a house in Ireland.

Brendan
 
Fergus said:
The house is on about half an acre 20 mins from Cork City centre.
Click to expand...

Is this a completely separate site or is beside your parents' home?

Lenders have been burnt trying to repossess and later sell homes which are next door to the parents. I wonder if that might be the real reason.

Brendan
 
Brendan Burgess said:
Hi Fergus

You say "the bank". Have you approached only one lender? If so, which one?

It does seem odd that they would not give you €200k on a house which is already worth €225k. Even if it only increases the value to €325k, they would still have loads of equity and loads of Loan to Income cover.

I think you should be able to get the mortgage you want.

However, I am not sure why you are keeping the Aussie property? It doesn't really make sense for an Irish resident to hold onto a property in Australia, unless you think you might return. But if you might return, you shouldn't be spending €200k on improvements to a house in Ireland.

Brendan
Click to expand...
I have only approached AIB at this point but now have a contact through a work colleague in BOI and have a more favourable second opinion.

It was logistically much easier to rent our Aussie dwelling than sell it when it came time to leave. Our plan is certainly to stay in Ireland long-term and selling it remains very much on the radar.
 
Brendan Burgess said:
Is this a completely separate site or is beside your parents' home?

Lenders have been burnt trying to repossess and later sell homes which are next door to the parents. I wonder if that might be the real reason.

Brendan
Click to expand...
The house is adjacent the family farm but it's certainly a very separate site with its own seperately fenced land, gate driveway etc. It's 500 metres from the farmyard and any very agricultural activities. The agent who valued it for us at the time of sale felt that the site was quite private and that the proximity to the farm would not impact at all on its value.
 
Lenders have found it very difficult to repossess any property in Ireland. But in particular, no one wants to buy a house where the next door neighbours are the parents of the people whose home was repossessed.

Brendan
 
You must log in or register to reply here.
Back
Top