Ireland property purchase using mortgage-free property equity

Hi.

My parents are living in the UK (entire lives) looking to purchase a property in the Republic of Ireland for around £70k / €95k, as a second home, or to let.

My parents, have said they are happy to use their unencumbered UK property valued at £200,000 as security for any type of loan available for this purpose.

They don't wish to remortgage.

Most places don't seem interested at all.

Surely someone can help!

Thanks.

Banks main criteria is ability to repay, they are not that interested in additional security. The whole point is that the bank wants to ensure a steady monthly return on the loan, having the option of having to sell a UK property to repay loan is no interest to them from a business point of view, they wouldn't even be interested if the property offered as extra security was in Ireland. A UK property as security is practically useless if they want to get the loan in Ireland, don't know the situation is in UK.

For the reasons set out by Monbretia, they won't get a loan in Ireland.

However, they might get a loan in the UK. But they have to remortgage.

They will be borrowing in sterling to buy a euro asset. This is risky.

There may be an advantage securing it on the UK property as the Loan to Value will be much lower. I think that under the UK mortgage rules, they will be required to demonstrate how they will repay the money.

Thanks for the responses so far. Very helpful. Just to point out, that both my parents are currently earning and in their late fifties. I am 29 and live with them (although I have a mortgage in principle for £72k). I am earning. Unsure as to whether this extra info changes things or gives more options, but there are essentially three of us hoping to make this happen, but unsure how best to tie things together.

In their late fifties they would be limited in the length of mortgage they could take out which would increase the repayments and the income required, assuming they had sufficient income and a hefty deposit an Irish bank might be interested as a holiday home type mortgage. It would be dependent on income, no reason why you could not also be on the application if again you have spare income, whether or not that is wise from a future point of view is another story.

Why don't they want to remortgage?

Why are they buying a property? What is the long term plan.

Sterling is strong against the Euro currently. Indeed for British people it makes buying abroad a good time.

Outside of Dublin and certain other major urban areas, prices are what I would term low. In many cases less than the rebuild cost.

Do they have a deposit.

What have you got a mortgage in principle for? Why would it be a good idea for all of you to do this together.

There are many Irish people in Britian that have holiday homes in Ireland, so there has to be banks that are used to doing this kind of business.

Hi Bronte.

The long term plan is for me to have a property for me to live in, (but this does not have to be immediately after purchase). During any periods where I am not living in the property, we were hoping to let it out. I have a high percentage of my income spare per month and have been looking around locally (bath / bristol) at options in terms of property. There is nothing which really fits the bill or is affordable. So i started to look further afield and realised that you get more for your money in rural Ireland. I have visited areas which I would like to live and have identified a few places on the west coast which are suitable.

My parents do have a deposit if required, possibly up to around £15k. I have enough saved to pay for costs incurred during the sale.

My mortgage in principle is for myself only, for a residential uk property through woolwich.

I have no commitments and are not tied to the uk or my job at the moment. My parents have spare income as do I. Exchange rate to Ireland is favourable. Irish property prices in rural areas are attractive. I like the country after spending time there. I have friends within ten mins of the location of desired property.

Also, any loans / mortgages I've come across from irish lenders require a €75k yearly income and 40% deposit, which for us, is never going to happen.

Thanks.

Update: I called Bank of Ireland earlier today and was told that we would have to look at a property which is worth at least 180,000 euros, as they only lend a minimum of €90k and accept a minimum deposit of 50% for buy to let.

Will be looking around at other mortgage lenders that are possibly more flexible, but as you have said, they are becoming a lot more stringent in their lending criteria these days!

If I do find anyone willing to lend, I shall post on here to help other borrowers! This may take a while..........

Well now Altonator what a different tale it is from when you first posted. You have zero deposit and you want your parents to buy a house for you, in a country you are not living in, because it is cheap.

Did you know living in Ireland is not cheap either, but houses in some parts are. Mostly places nobody wants to live (no I'm not going to name them but we all know where). They built an amazing amount of crap apartments in Ballygobackwards that should never have been built. People want houses. Not apartments. And even the houses they did build, they are in many cases a disaster. I mentioned on the Priory hall thread a couple of years ago that I was positive there were other Priory halls and was dismissed, especially when I said the authorities knew there was but will not examine those buildings as they don't want to be caught like DCC (Dublin County council) and low and behold, just a month ago, about 8 houses burnt out because of a fire in one and no firewalls due to shoddy workmanship and zero state inspections.

You have in addition little chance of any decent employment in the West of Ireland - have you even looked into this? And the West is some treck from Bristol. Have you seen the roads once you leave say Galway and head to Mayo or Leitrim.

I think you need to rehink this plan. So some more questions. Are your parents Irish? Do you have qualifications that would easily get you employment elsewhere. Why have you no deposit saved despite telling us you have spare income. Do you think it's right that your parents would pay your deposit, mortgage the house they have worked all their lives to own, and in their late fifties take on the liabilities of your dream for you. Of course they want the best for you, but is it right for you to do that to them.

On a more practical level, why not buy in Bristol or Bath something you can afford, and if you cannot afford something now, how about saving, getting a better job through re education and securing your own future. How much is a property in Bristol, and what exactly have you looked at.

What is wrong with you continuing to live at home if it suits where you work and your parents are happy for you to do so, though I do think people should leave home but sometimes it doesn't happen.