Buying an Irish property as an expat working overseas
Buying an Irish property if you’re living and working overseas as an expat isn’t exactly straightforward, and needs a substantial deposit backed up by an impressive salary. The entire process has been made more complicated than is necessary by the EU Mortgage Credit Directive’s extra restrictions on banks lending to expats working overseas and being paid in a non-euro currency. Few lenders are active in this sector and only one is a bank which insists on a 50 per cent deposit and charges twice the normal borrowing rate on the remainder.
Also due to the EU directive, most lenders have dropped out of the expat buy-to-let and investment market. For example. Ulster Bank accepts applications but takes a ‘case by case’ approach to actually granting a property loan to a non-resident. Permanent TSB will not now offer loans to anyone living outside the EU, and KCB Bank talks the talk but doesn’t, according to brokers, walk the walk, thus wasting everyone’s time and effort. However, the same brokers have had success on behalf of their clients by using AIB’s broker arm, Haven.
A few mortgage brokers take the time and trouble to travel to the Middle East and Dubai specifically to meet up with Irish expats interested in property purchase. At the present time there’s a surge in interest, especially from Irish nationals who fled the downturn and are now considering a property purchase well ahead of their return to the home country. The most popular product is Haven’s FX, lurking under the financial radar but well worth checking out. It’s aimed at expats intending to return to Ireland in the future but now needing a holiday home able to become their permanent home in the future.
Deposits required under this specific loan are high at 65 per cent, but the variable rates aren’t extortionate and are set at significantly less than their competitors’ offerings. The catch is that applicants must show they can afford both their present rent and the repayments on the loan in order to qualify. The product is basically aimed at those living and working as professionals in places such as the Middle East, and who have rental allowances as part of their relocation packages. Finally, if buy-to-let is the intention, interest rates are comparatively high and, should the expat owner return and live in the property, the high rates will still stand.
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