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Banking from Abroad

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  • 09-04-2008 4:09pm
    #1
    Phil01
    Closed Accounts Posts: 206 ✭✭


    OK i have a dilema, first please excuse my lack of knowledge on this subject. Basically what i want to do is buy a house in Brazil, i'm going to be moving soon and i have a job lined up. Im currently a Bank Of Ireland customer. I'm wondering is it possible for me to get a loan or something from boi and buy a house in Brazil and then payback the bank from Brazil?

    So basically i will be working in Brazil and paying back my loan from there?

    Thanks.


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    #2
    unclebill98
    Registered Users Posts: 3,816 ✭✭✭unclebill98


    Banks very rarely give straight (100%) out loans for over seas property. You would need to release money from an currently owned property.

    Best bet is to ask BOI what there policy is on it. You'll get a straight answer.


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    #3
    stepbar
    Closed Accounts Posts: 6,123 ✭✭✭stepbar


    Correction: Customer wants a personal loan to buy a house in Brazil, move home and pay off loan whilst in Brazil. Good god. :eek: You might as well not pay the loan. Talk about a credit risk. How would BOI get it back if you defaulted? They'd never get it back.

    Why don't you borrow the money in Brazil?


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    #4
    unclebill98
    Registered Users Posts: 3,816 ✭✭✭unclebill98


    Well, If he went to a bank for a personal loan they'd say no. Cause it would have to be a mortgage and then all the other issues would arise. But yeah, there is the credit risk too.


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    #5
    stepbar
    Closed Accounts Posts: 6,123 ✭✭✭stepbar


    unclebill98 wrote: »
    Well, If he went to a bank for a personal loan they'd say no. Cause it would have to be a mortgage and then all the other issues would arise. But yeah, there is the credit risk too.

    The fcuked up thing is that I could see him getting it if he kept his mouth shut. That's the scary part.

    I get it all the time. Philipino nurses wanting to buy houses at home. Major credit risk TBH.


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    #6
    Phil01
    Closed Accounts Posts: 206 ✭✭Phil01


    Thanks for the replies, so basically i have 2 options? Personal loan or morgage loan. All i would need would be around 200,000 - 300,000 euro. I've never gotten a mortgage before so i don't know whats involved with that. What is my best bet. Where is the Credit risk? Is this from the banks point of view? Can't i work out a deal with the bank like i payback over 30 or so years...


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    #7
    stepbar
    Closed Accounts Posts: 6,123 ✭✭✭stepbar


    Unfortunatly, no bank will lend to you based on your proposal. It's next to impossible to secure the title deed on a property abroad. A personal loan for that amount would be out of the question as the max is over a 7 year period. You best bet is to borrow back home TBH. I don't know the price of property in Brazil but from my experience property can be bought cheap in the Philippines and thats why most go for personal loans. The credit risk lies on the fact that said customer could move back to their own country before the loan ends.


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    #8
    Phil01
    Closed Accounts Posts: 206 ✭✭Phil01


    ok well first off i'm irish. And i want to payback the loan from Brazil. So i will be living and working in Brazil and also paying back BOI with my salary from Brazil. The price of the house works range from 200,000 euro upwards, of course i can go lower, but this is more or less a target range for a house i would like to get.


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    #9
    Blackjack
    Registered Users Posts: 3,611 ✭✭✭Blackjack


    There's a whole load of other risk there -
    A -The value of the House may Plummet and therefore if you decide to hand over the keys, BOI are stuffed with a House in Brazil worth less than they're owed.

    B- the value of the Brazilian Real may go down vs the Euro, meaning that it's more expensive for the Borrower to pay back the loan, and the likelihood is that the relative value of the Property is lessend, and back to scenario A once again.

    Can't see them going for it if you're planning to move there and pay the loan from there.

    Why don't you apply for a Loan from a Local Bank in Brazil?. Appreciate it's not a short hop over there but you could check out that option.


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    #10
    unclebill98
    Registered Users Posts: 3,816 ✭✭✭unclebill98


    As said there is no chance of getting this. Banks will simple not loan you the money here in Ireland to buy abroad. Your best bet is to borrow in Brazil. Save up lots and hope you can get one over there.

    I've seen personal loans pay for small house (20-30k) with total lies being told. But that amount would have to a mortgage.


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    #11
    Phil01
    Closed Accounts Posts: 206 ✭✭Phil01


    Crap, seems like i don't have any options to do this then. I dont want to borrow from Brazilian bank due to the fact i won't get as much. In comparison to the euro.
    What are the banks like to deal with, like can i make a proposition where i agree to live there and make the payments until they are all paided in full?
    Is there any options open to me to borrow this money from Bank in Ireland and payback from Brazil?


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    #12
    unclebill98
    Registered Users Posts: 3,816 ✭✭✭unclebill98


    I would think not. But ask BOI, no one where will be able to give you a 100% answer, just opinions.

    As for a Brazil bank, they ain't going to take your passport off you for the duration of the mortgage...


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    #13
    ircoha
    Closed Accounts Posts: 2,290 ✭✭✭ircoha


    Phil01 wrote: »
    Crap, seems like i don't have any options to do this then. I dont want to borrow from Brazilian bank due to the fact i won't get as much. In comparison to the euro.
    What are the banks like to deal with, like can i make a proposition where i agree to live there and make the payments until they are all paided in full?
    Is there any options open to me to borrow this money from Bank in Ireland and payback from Brazil?

    Before I deal with the detail: nobody who is emigrating to a foreign country would contemplate buying a place like this before spending at least 6 months there sussing it out

    Op: you don't seem want to take on board what is being written here?

    You want B of I to lend you 200/300 k secured on an asset in Brazil and you will 'agree to live there and make the payments until they are repaid in full?' :D:D Get a grip.

    Have you looked at the legal system there? Can you buy freehold or is it leasehold or something else?
    Can it be even secured offshore?
    can you as resident of Bra have this sort of foreign debt which is a drain on their ccy reserves?

    What is the current rental market like in Bra versus the cost of mortgages?

    On what basis can you say this:
    I dont want to borrow from Brazilian bank due to the fact i won't get as much.
    Where is the evidence to back this up?

    What is your current borrowing power in Ireland with the B of I for both secured and unsecured debt?
    Have you borrowed and repaid on time any loans thus far?

    Even if you did get a euro loan, the ccy risk is high: suppose over a 10 year period the euro appreciates by 15% against the Real and u have borrowed 200k euro, the loan amount will have gone up by 30k in terms of what u have to pay back from a Real based income.

    My advice: go there , rent, conserve your cash and chill out: do u really want to have a millstone like this around your neck in a place like Brazil?


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    #14
    Phil01
    Closed Accounts Posts: 206 ✭✭Phil01


    ircoha wrote: »
    Before I deal with the detail: nobody who is emigrating to a foreign country would contemplate buying a place like this before spending at least 6 months there sussing it out

    If your talking about the housing market i have sussed it out, i know what i want to buy over there.
    ircoha wrote: »
    Op: you don't seem want to take on board what is being written here?

    Of course im talking on board what people are saying here and i appreciate it greatly, i guess i just don't want to believe that they are the only options i have.
    ircoha wrote: »
    You want B of I to lend you 200/300 k secured on an asset in Brazil and you will 'agree to live there and make the payments until they are repaid in full?' :D:D Get a grip.

    What's wrong with this? I'm easily willing to do this. This is no problem to do. btw i have Brazilian citzenship as my wife is Brazilian. So staying in Brazil is no problem for me.
    ircoha wrote: »
    Have you looked at the legal system there? Can you buy freehold or is it leasehold or something else?

    I can buy the house freehold.
    ircoha wrote: »
    Can it be even secured offshore?

    I haven't looked into this. But i will be in Brazil when buying it if thats what you mean.
    ircoha wrote: »
    can you as resident of Bra have this sort of foreign debt which is a drain on their ccy reserves?

    I don't know about this, i haven't looked into it legally yet. But im sure it wouldn't be a problem.
    ircoha wrote: »
    What is the current rental market like in Bra versus the cost of mortgages?

    Of course it would be cheaper to rent, but i don't want to rent. I want a house to buy and live in for many years to come.
    ircoha wrote: »
    Where is the evidence to back this up?
    Well its simple the euro is worth more than the Brazilian Real. If i goto brazilian bank i won't get as much. The exchange of the euro is worth alot more.
    ircoha wrote: »
    What is your current borrowing power in Ireland with the B of I for both secured and unsecured debt?
    Have you borrowed and repaid on time any loans thus far?

    My borrowing power is good, i have paid back every load i have on time and even a few years before i was due to finish paying other personal loans. So i don't think if i asking to buy a house in ireland it would be a problem for me to get a loan.
    ircoha wrote: »
    Even if you did get a euro loan, the ccy risk is high: suppose over a 10 year period the euro appreciates by 15% against the Real and u have borrowed 200k euro, the loan amount will have gone up by 30k in terms of what u have to pay back from a Real based income.
    This wouldn't be nice, 30k of course is alot of money extra to pay back but i guess if i got the loan that would be a risk i would be taking. Would the bank have a problem with that?
    ircoha wrote: »
    My advice: go there , rent, conserve your cash and chill out: do u really want to have a millstone like this around your neck in a place like Brazil?

    Thanks for the advice, probably the best response i got so far. I guess i'm willing to do all this. At the end of the day it's going to be no different than buying a house here in ireland and paying it back to the bank. I'm just wondering basically what are my chances in getting this from the bank? I don't want to rent a house, i'm looking to buy for my family home.


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    #15
    BuffyBot
    Registered Users Posts: 24,924 ✭✭✭✭BuffyBot


    At the end of the day it's going to be no different than buying a house here in ireland and paying it back to the bank. I'm just wondering basically what are my chances in getting this from the bank?

    And you've been told it's very different. Hugely so. As such I'd say your chances of getting it financed from here are virtually nil.

    I can't see a bank lender in their right mind going for this one!


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    #16
    stepbar
    Closed Accounts Posts: 6,123 ✭✭✭stepbar


    I work for said bank and I can tell you now that this proposal is a non runner. There's no way of securing the title deed to a house in brazil. Full Stop. As I've said the only way you are going to be able to do what you want to do is by borrowing in Brazil.


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    #17
    The Rooster
    Registered Users Posts: 4,508 ✭✭✭The Rooster


    Phil, I think the main point your missing is that for an Irish bank to give you €200k - €300k, they will need security (in addition to ability to pay the loan of course). And in almost all circumstances (most definitely including your circumstances), they will require Irish security. So unless you have an Irish asset worth €200k to €300k, an Irish bank will not give you the loan.

    In addition, any financial advisor worth their salt, would alwyas advise to have a mortgage in the same currency as the property. Unless you're an FX speculator its too big a risk to carry a currency risk in addition to the property risk.
    Phil01 wrote: »
    I dont want to borrow from Brazilian bank due to the fact i won't get as much. In comparison to the euro.

    Well its simple the euro is worth more than the Brazilian Real. If i goto brazilian bank i won't get as much. The exchange of the euro is worth alot more.

    That makes no sense to me. From the bank's point of view its pretty much irrelvant what the stronger currency is at the moment. Lets say you pick a house worth 800,000 Reals, and the current rate is 2.66:1. That means you either get a loan of €300,000 or 800,000 Reals. One isnt more than the other - they're both equal.

    And if your pay is (lets say) €60,000 that equals Reals 160,000 - so no matter what currency you're talking about, your ability to repay is the same at the moment you take out the loan, therefore no advantage to a euro loan.

    A possible disadvantage may be that Brazilian banks in general might only give say 60% loans - but that's nothing to do with value of curency, and perhaps Brazilian banks give 95% loans???

    But as I said earlier I think it would be a very bad idea to get a loan in euro to buy a house in Brazil, because the currency risk is too high. Someone mentioned you could lose €30k in FX loss, but Brazil is still regarded as a developing economy and it could swing wildly either way - there is no way of quantifying it, but you could lose €100,000 in 5 years if things went badly the wrong way. You could gain either, but unless you're an FX speculator it wouldnt be worth the risk.


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    #18
    Phil01
    Closed Accounts Posts: 206 ✭✭Phil01


    Ok thanks for the comments guys. I'm a stubborn person so i will probably go see the bank themselves about this too. But your comments are all appreciate and helpful. Thanks. I think alot of you are right, and perhaps it is alot safe for me to borrow from Brazilian bank. I think thats the road im going to take now. Thanks for the help everyone.


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    #19
    Lizzykins
    Closed Accounts Posts: 637 ✭✭✭Lizzykins


    As most of the other posters have said already there is no way the bank will lend you money on a Brazilian property. Never mind the fact that there may be currency fluctuations the bank have no way of realising their asset if you default on the loan. I worked for BOI for 20 odd years and believe me the hoops you have to go through to get any type of mortgage on a property here are unbelievable-never mind Brazil. Your only hope is a Brazilian bank as others have said.


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    #20
    stepbar
    Closed Accounts Posts: 6,123 ✭✭✭stepbar


    Lizzykins wrote: »
    As most of the other posters have said already there is no way the bank will lend you money on a Brazilian property. Never mind the fact that there may be currency fluctuations the bank have no way of realising their asset if you default on the loan. I worked for BOI for 20 odd years and believe me the hoops you have to go through to get any type of mortgage on a property here are unbelievable-never mind Brazil. Your only hope is a Brazilian bank as others have said.

    Dont I know LOL. I think the advise given on this thread is quite good TBH.


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    #21
    Toots
    Administrators, Business & Finance Moderators, Society & Culture Moderators Posts: 16,919 Admin ✭✭✭✭✭Toots


    Lizzykins wrote: »
    As most of the other posters have said already there is no way the bank will lend you money on a Brazilian property. Never mind the fact that there may be currency fluctuations the bank have no way of realising their asset if you default on the loan. I worked for BOI for 20 odd years and believe me the hoops you have to go through to get any type of mortgage on a property here are unbelievable-never mind Brazil. Your only hope is a Brazilian bank as others have said.

    LOL, I was just thinking the same thing! BOI are easily the most conservative mortgage lenders in the market! Even at the height of the property explosion when it was much easier to get a mortgage, they wouldn't have given finance for this. You could ask around and see do any banks have affiliations with any banks in Brazil and see could they work something out. I know BOI have some sort of arrangement with LaCaxia in Spain for people buying second homes etc over there, but I wouldn't hold out too much hope. As others have said, your best bet is to see what a Brazillian bank will do for you.


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    #22
    stepbar
    Closed Accounts Posts: 6,123 ✭✭✭stepbar


    Toots85 wrote: »
    LOL, I was just thinking the same thing! BOI are easily the most conservative mortgage lenders in the market! Even at the height of the property explosion when it was much easier to get a mortgage, they wouldn't have given finance for this. You could ask around and see do any banks have affiliations with any banks in Brazil and see could they work something out. I know BOI have some sort of arrangement with LaCaxia in Spain for people buying second homes etc over there, but I wouldn't hold out too much hope. As others have said, your best bet is to see what a Brazillian bank will do for you.

    Defo (as above) and with Mortgages in Spain. Anywhere else I don't know. I dont think we have agreements with any other bank but LaCaxia TBH.


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