Advice on 1st mortgae and Using house as collateral

B

BrianMVP

Guest
Just wondering about how people or able to use you own house as 'collateral' to purchase the next one. Hear a story not to long ago about a friend if a friend who is bout 28 and owns 7 houses, rents them out... and only bought his first at 22. With this in mind he only has a average job approx 35K per yr...... and yeah im sure he doesnt sell drugs haha.
Anyway i find this very interesting and jus wanted to know how this whole thing works coz im quite clueless with this area as havent bought me own place yat.
At the moment im carefully considering investing in foreign property as a short term investment to get up the money for a deposit on a house here. Im only 20 was thinking taking out mortgage for up to 80,000 euro to get myself started shortly.
IS THIS A GOOD IDEA, and if i did get a small morgage for a foreign property how would this affect me if I were to sell up in say 4 years and apply for a large morgage by that stage itll probally a mortgage of 3million hahaha.
Anyway advice welcomed thanks
 
Re: Advice on 1st mortgae and Using house as collateral???

A lender will give you approx 70% of the purchase price of an investment property in Ireland. You have to put up the other 30% plus stamp duty, legal fees etc. It depends on the property too....the lender has to see that the rent will more than cover the loan. In the case of the friend above, once he owns one property, he can release equity on it to pay the deposit on the next one and so it goes on. I hope he has other investments too as he's very heavily invested in the property market.

I don't think anyone will lend you 80K to buy a property abroad. It's hard enough for someone who owns a house to get a loan to buy abroad and most end up releasing equity on their own PPR.
 
Re: Advice on 1st mortgae and Using house as collateral???

some lenders will give up to 85% of the purchase price of an investment property.

potential rental income will be discounted by 20% - 25% in their affordability calculations though.
 
Re: Advice on 1st mortgae and Using house as collateral???

just completed this myself, released equity on PPR to purchase foreign investment property, however I described it as holiday home, no issues from any of the lenders - usual crew - I enquired with, ended up with BoS
 
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