Loan to buy land and build property outside Europe? Should I get the loan in the destinationcountry?

mrcheez

General question for now, but say I wished to purchase land abroad and then build a property on it and the total may be circa €300,000.

Is the general approach to get the loan from a bank in Ireland, or should I try to get the money in the destination country?

Assuming I have a property in Ireland with no mortgage worth around that, could that be re-mortgaged to get the loan?

Calahonda52

yes in principle, especially since the legal system where you are buying may not be ....

If the Irish gaff is your PPR then .....

LVF and ability to service the debt without relying on any form of pension income will be considerations so this may limit the term

FX exposure would be a concern as well as would and political risk of a prohibition on capital outflows if you sold

"Last thing I remember

I was running for the door

Had to find the passage back to the place I was before

"Relax", said the night man

"We are programmed to receive"

You can check out any time you like, but you can never leave"

mrcheez

https://www.boards.ie/discussion/comment/121896847#Comment_121896847

is "yes" a reply to get the loan in Ireland, or get a loan in the other country?

Calahonda52

Ireland. IMO

coylemj

OP, if that property you own in Ireland is not your principal residence then it's worth trying to see if you can find a lender.

mrcheez

The property in Ireland is principal. Does that make it harder to re-mortgage (or use against a loan some way)?

Calahonda52

If the PPR and anyone else has an interest in it through marriage or " durable relationship !" Then you will need their consent, and banks are more risk adverse as in effect they cant really sell it easily

.. are there kids under 18?

How well have you explored property rights, X border capital flows, property tax system for non nationals in the other country.

mrcheez

https://www.boards.ie/discussion/comment/121900905#Comment_121900905

nah it's all my own property, no other interest

The other country rights isn't an issue, all acceptable, just the loan for the initial purchase/build is my concern.

XsApollo

Can you release equity like that in Ireland? Is there not an age limit? 55 or 60?

If you are under that age? when I was looking at equity release or using the house years ago, their were rules , it was for education, home improvements and something else?

mrcheez

yeah under that age.. I guess prob best speaking to a bank. Maybe best to go with the bank I use for my salary/prev loans in the past?

The bank I had my mortgage with was a different one, maybe also a good one for the loan.

Are there any specialty banks that deal with loans for foreign investments?

Jim2007

It is very unlikely you'll find any bank willing go do a cross border loan for a private individual, especially for property. They know nothing about the country nor it's property market and consequently are unable to assess the risk and are very unlike to invest in finding out. And on top of this it would impose additional obligations for their banking license even if it were an EEA state.

You might be able to get an Irish bank to do a back-2-back loan on the bases of your property on a commercial basis, but it would depend on the country and the reputation of the counter party. I know UB used to do this, but they are no longer a player.

Investigate it of course, in case there is something there, but it will probably be more beneficial to concentrating in obtaining a loan from a local bank where you intend to buy the property.

mrcheez

It might be an Irish bank issue, other nationalities (UK, French, Oz, NZ, etc) have property but got loans in their home country.

Anyway will see.

Jim2007

https://www.boards.ie/discussion/comment/121903738#Comment_121903738

Well I have worked exclusively for mainland European banks and that is the perspective I present. I have been at banks that offered this service and lost on it, been involved market assessments that concluded it was a bad idea etc...

Of course there are many people who have got mortgages in their home country and even non residents who have done it, but on property in that country. Which is what I suggested you concentrate on doing in my last post. You however asked about using a cross border loan to finance property, so I'm not sure what your point is.

mrcheez

You suggested I get a loan in the destination country, but my point was that others have easily got a loan in their home country rather than local bank.

Not sure the confusion on what the point is.