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Mortgage Question - Source of Funds

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  • 12-04-2021 9:46pm
    #1
    egg102530
    Registered Users Posts: 30 ✭


    Would really appreciate thoughts on this one.

    I originally purchased my current property (small house) as a non resident landlord and due to rules at the time had to put in a considerable deposit and pay quite a high interest rate. I am now back in Ireland, living at the property and recently completed a remortgage process during which I released some of the equity of the property. New LTV is 55% and the more favourable interest rate means my monthly mortgage payment is pretty much exactly the same but I have a bit of cash released from the property.

    I am now considering buying a bigger family home and keeping the current property as a rental. I would like to use some of the equity released funds to complement my deposit for the new property. BOI have approved in principle the new mortgage for me but say I cannot use these extra funds from equity release as part of new property. I also have approval in principle from KBC who have not specifically stated any restrictions in relation to use of the additional funds however I am concerned that they may highlight this later in the process.

    Does anyone know if this is typically an issue with banks here and is it a regulatory requirement or down to bank discretion. TBH, I didn't originally do the equity release with intention of using it for a new property but now that I have it I would like to go this route as if available for use it would just about save me from having to sell current property.
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    #2
    jimmycrackcorm
    Registered Users Posts: 14,339 ✭✭✭✭jimmycrackcorm


    Is BOI providing the mortgage for your current property, as that might explain why they don't want to be on the hook on this basis?

    Otherwise, it shouldn't make a difference to any other bank.


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    #3
    egg102530
    Registered Users Posts: 30 ✭egg102530


    jimmycrackcorm wrote: »
    Is BOI providing the mortgage for your current property, as that might explain why they don't want to be on the hook on this basis?

    Otherwise, it shouldn't make a difference to any other bank.

    Thanks jimmycrackcorm. BOI are not providing mortgage to current property but seemed to have an issue with additional borrowed funds being added to the mix for the new property.

    I am also approved in principle with KBC who did query the source of the equity released funds. I was open about it and whilst they did not specify any restrictions I am slightly worried that I get an offer accepted now only to find out weeks into the process that a chunk of my deposit can not be considered and need to back out. I probably need to clarify with KBC but also wanting to let sleeping dogs lie...


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