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Mortgage Deposit – Equity Release

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  • 19-11-2017 11:01pm
    #1
    Fastcat
    Registered Users Posts: 6 ✭


    Hi,

    Does anyone know if equity released on a property in the UK can be used as part of a mortgage deposit for a residential buy to let property in Ireland?
    I have successfully released the equity on the property in the UK and informed my UK bank that I planned to use the equity released to purchase a buy to let property in Ireland, my UK was ok with this.

    However my bank in Ireland has informed me that part of the deposit cannot be borrowed money; however everything apart from that was in line with their lending rules, repayment capacity etc.

    To my mind this is nonsense as the Irish bank has no risk as the UK bank has no recourse on the equity released.

    Let me present two examples below:

    1. Supposing an investor purchased a property outright for €150,000 at auction for example as they did not have time to get a mortgage approved. Then six months down the road he/she decides to mortgage that property to release some equity to purchase a second property, let’s say €75,000.

    2. The same investor wished to purchase the same property but this time had a mortgage in place therefore he/she only had to use €75,000 of savings for the mortgage down payment and kept €75,000 savings. Six months down the line he applies for a second mortgage and has €75,000 savings which he can use as a deposit for the second property.

    So option 2 would be accepted by the bank but option one isn’t because the deposit would be considered borrowed money?

    If anyone can shed some light on this or provide some useful guidance it would be much appreciated.

    Thanks in advance.


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