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Mortgage against value of Land

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  • 18-05-2005 11:54am
    #1
    seabee
    Registered Users Posts: 707 ✭✭✭


    I own some land and I was wondering if it is possible for me to take out a mortgage against the value of the land?
    Any help would be appreciated.


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    #2
    Nuttzz
    Registered Users Posts: 3,774 ✭✭✭Nuttzz


    it is possible for you to use land as security, how much you'll get will be down to vaulations etc


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    #3
    seabee
    Registered Users Posts: 707 ✭✭✭seabee


    I suppose the bank gets somebody to value it?


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    #4
    nlgbbbblth
    Closed Accounts Posts: 5,668 ✭✭✭nlgbbbblth


    seabee wrote:
    I suppose the bank gets somebody to value it?

    they'll usually accept a valuation from a qualified local auctioneer

    However if the land is worth €200K it doesn't mean the bank will lend you €200K - they usually write down the value by 20% - 30% (banks being banks are conservative in nature) so you will probably only be able to borrow say €140K - €150K

    naturally repayment capacity comes into play too.


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    #5
    boa-constrictor
    Closed Accounts Posts: 109 ✭✭boa-constrictor


    If your selling the land they will give you a bridging loan while you wait for the sale proceeds (this is called a closed bridge). If you havent a sale contract in place but it is on the mkt they may give you an open bridge (if they like you and value your business). But if your not planning to sell the land and you want funds to say for instance, start up a business they will look at the business idea and judge it on that because this is where repayment of the loan comes from. It is a big help that you have the land to secure the loan but repayment capacity is king.


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