Signed contracts for US property without legal advice or mort approval: Advice?

H

Harvest

Guest
Hi folks,

Need some advice....please

I signed contracts for a property in the US. Paid deposit and everything- through an Irish based company acting on behalf of the US developer. I signed these without legal advice and without getting mortgage approval.

I have tried lots of ways to secure funding but cant. I have tried a US mortgage and the Irish banks wont even touch it. My parents were initially going to back me as they had decided to re-mortgage their home for me but now things are worse than they were 9 months ago and they say its just a too risky investment.

So, I was wondering, can I get my deposit back? Also, is the developer likely to come after me and seek compensation.

I know I'm foolish, but I'm only in my early 20's and I wanted to move to the US in a few yrs... I should have taken advice and now I'm probably going to pay heavily for my mistake..

Any thoughts welcome?

Thank you
Sabrina
 
Re: Contract Advice

How much is your deposit? Did you get any guarantees in writing from the agent stating you would get a mortgage?
Developer wont come after you I wouldnt think. He'll pocket your deposit and put the unit back up for sale.

You could try and give him the hard luck story and ask for some of your deposit back due to extenuating circumstances but let him keep an administration fee for his troubles. It would come down to the individual developer whatever response you would get
 
Re: Contract Advice

Hi there. My deposit is for 30000 usd. There is garaunteed rental income on the unit for 2 years at 1600 usd per month less fees etc. A year ago, went I first paid the adminstration fee, there would have been no problem with the mortgage but now its a different story.

I got no gaurantees in writing stating I would get a mortgage. Its just so upsetting right now, all my savings went into this deposit.

The contract is so complicated and I should have signed it in front of solicitors. There could be a get out clause in it.
 
Re: Contract Advice

Well, you could still engage a solicitor to examine the contract, and see if there is a way out. First check if the contract is governed by Irish or US law (it should state that somewhere), as that will affect your choice of solicitor. Of course this will cost you, and there is no guarantee of a favourable outcome.

Could you move to the US now? If so, you would have a better chance of getting a mortgage from a US bank, I'd imagine.
 
Re: Contract Advice

* Have you actually applied for a US mortgage ... from a US bank? (this would have no relevance to your paretns etc, as the mortgage is given based on the security of the property itself). If you have an income etc, you should be able to get a mortgage in the US. The catch is, in today's US mortgage market, you may only get up to 65% loan to value, the interest rate might be realtively high etc. ... but you should be able to get a mortgage.
 
Re: Contract Advice



Yes, I applied with a US bank who are affiliated with the estate agent here in Ireland. Because of my income and age, they will only do a 60% loan to value.. and quoted 7.135%
Thanks
 
Re: Contract Advice


I suggest you do a few things. Read the contract thoroughly and see is there a clause allowing the deposit to be refunded should you be denied finance. If its in there it will stand out if your looking for it.


Second is to scour all the banks and see what mortgages they are offering at the moment over there, you should be able to get a much better rate then that. over 7% is huge rate because the US have been lowering their interest rates recently. You might need to look for a stronger bank
Email this guy middlesbrough1960@hotmail.co.uk his name is Gary he has connections to banks all over the world for mortgages and will be able to do something for you im sure if there is collateral involved, and get you a better LTV

another option would be to ask the agent to resell it for you offer them a sweetner of maybe 10K. Probably a slim chance of it happening in current climate but worth a shot and would mean you dont take such a big hit
 
Re: Contract Advice

Hi Guys,
Looks like my parents are going ahead with it now...Gosh the mortgage rates have really moved up and down over the last year..
What rate/bank should I go with?
I'm thinking rates are going to fall further. So I'm looking at a tracker rate.. AIB and IIB are dropping there fixed rates at the moment.

thanks alot guys
 
Re: Contract Advice

you are looking in the wrong country for your mortgage thats why your rate is so high - look in the US where the rates are lower Im sure theres a bank that will provide a mortgage to foreigners
 
Re: Contract Advice

I was quoted 6.5% from an American bank...This is a 30 year fixed...
The rates there seem high!!

Wouldnt I be better going with a tracker mortgage in ireland as I am borrowing 200000 euro and re mortgaging on my parents 500000 house...so LTV 40%

I could have got 4.75% from NIB but wasnt quick enough...they are up to 5.28 now i think..

I can see the dollar going to 1.20 by summer 2009..
 
Re: Contract Advice

The dollar could just as easily go in the other direction.

If you're going to be receiving rent in dollars, it's less risky to get your mortgage in dollars also. You really ought to be looking at getting a mortgage from a US bank. Perhaps you should take a trip over there and see what you can organise on the ground. If you've paid USD 30,000 deposit already, then the LTV might be low enough for a US bank to consider it without any need for guarantors.
 
I have a property in the US and secured a mortgage through Chase directly with no major problems. Just ring the mortgage number on their website. Most of the work is done by email and fax and you dont need to go over to the US. The big difference with the US fixed rates are that you can pay them off at any time in full without any penalty. So its fixed for 30 years but yu can pay it off tomorrow at no extra charge.

They also have a system where you can pay a lump sum at draw down to reduce the interest rate level. If you pay say 5k dollars it would reduce the rate from 7 to 6%. See the banks websites for further information
 
Re: Contract Advice

GDE said:
Email this guy middlesbrough1960@hotmail.co.uk his name is Gary he has connections to banks all over the world for mortgages and will be able to do something for you im sure if there is collateral involved, and get you a better LTV
Click to expand...

Not doubting the wisdom of your advice for the moment, GDE, but I would have thought that it is strange for any reputable professional to be working off a hotmail address?
 
Re: Contract Advice

ubiquitous said:
Not doubting the wisdom of your advice for the moment, GDE, but I would have thought that it is strange for any reputable professional to be working off a hotmail address?
Click to expand...

Indeed wasnt sure at the time if he would be comfortable sending out companies email, but he has no problem - gary.golden@bhomes.com
 
OP - have you been to see the property? Is the property in a good location? How did you pick it? Have you checked out the builder/developer/agent? Are they reputable? You should be able to answer these questions before going any further and certainly before letting you parents become liable.
 

I haven't been to the location but I have researched it. Its in a very good area. I know the agent well and the developer is fine. I've seen live video of the appartment. My only concern really now is currency fluctuations and I dont want to finance it in dollars...I want to go ahead with the strong euro..it wont last for much longer imo...I'm looking at this as a 5 yr investment and hopefully after these 5 yrs if I havent moved to the US, then I can buy in Ireland in a more stable environment...
 
Harvest said:
My only concern really now is currency fluctuations and I dont want to finance it in dollars...I want to go ahead with the strong euro..
Click to expand...

Well - if your only concern is currency fluctuations then you should purchase it in dollars - not in another currency.
That is assuming the mortgage will be a full repayment mortgage being paid in dollars from rent of whatever as opposed to an interset only which you plan to flog in a few years hoping to make a profit - in which case it's pure pot luck where the currency rate is between now and then.

You should put more thought into the whole currency thing. I suspect you haven't thought it through properly.

Also I definitely wouldn't encourage buying in euro because you think dollars are 'good value' at the moment.
No one can tell the future on currency speculation.
No one would have thought 2 years ago that the dollar could reach 1.60 but it did.

If you buy in euros then insetad of having an investmnet worth 'x' ('x' being teh price of teh property) you in fact have exposure to 2 times 'x' as you are also investing that much in teh currency when not buying in dollars.

Twice the risk - could be twice the gain - could also be twice the loss.
You jave to decide whether you want to take in that extra risk.

It is certainly not a free gamble or anything though. It will cost you if the currency goes against you.
 
When did you sign the contracts for this property? May I be so bold as to ask where the property is? If I said Florida, would I be far wrong? Have you tried looking at zillow.com to see similarly priced properties in the area?

The only reason I ask, is that there are areas in the U.S.A that have seen savage price drops thanks to the sub-prime fall out. It may be worth considering walking away from this property, if property values have fallen by more than E30,000.
 
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