I have a Revolut Cryptocurrency account on which I have made a reasonable and steady profit and the balance is currently hovering around € 23,500. In addition, I benefit from an employee shareholding plan in my company which allows me to buy shares in a tax-efficient manner, with a current valuation of around € 16,000.
I am now in the position of wanting to buy my first home, but a bank told me that I cannot use either as collateral without cashing them out. Where can I do it? It seems to me that this is a very old fashioned attitude. Is there a lender who sees it differently?
Banks, unfortunately, tend to err on the side of caution when lending hundreds of thousands of dollars to borrowers. They have very strict guidelines on what can and cannot be included in calculating mortgage deposits and eligibility criteria, many of which are mandated by the Central Bank.
Trevor Grant, President of the Association of Irish Mortgage Advisors, adds: “Well done for this level of investment. When asking about using these investments as collateral, I guess you want to leave them where they are and offer them as a form of collateral for your mortgage?
Unfortunately, no home loan provider will take collateral like these assets for a mortgage. Lenders only consider one asset as collateral, and that is the house you are buying.
“The alternative is to cash out those investments and use the proceeds as part of your home fund balance, but before you do that you need to determine whether or not you have other savings that can be used. for your deposit.
“If so, you can continue to focus on making big gains on your investments. I suggest you speak to a mortgage broker who can offer you market-based advice and who should be able to look at your options in more detail.
I am an 81 year old retired gentleman. I am in good health and benefit from an occupational pension which is in the Chartered Retirement Fund (ARF) and from which I take 7pc pa on average, in addition to a contributory pension from the State, which keeps me at the easy.
I have a small commercial property that I have been renting for many years, but the ongoing Covid-19 closures have caused me to lose my tenant and I am unwilling to re-let it.
As I have now decided to sell, what are the tax implications (I am waiting for a CGT invoice), if I could place the product in the ARF now? Would that be beneficial to me?
I can see the appeal of this proposal to you, but according to Fiona Conroy of the Independent Trustee Company legal division, it won’t be possible.
“As a post-retirement vehicle, contributions cannot be made to a FER and there would be no tax benefit to doing so, as there is no relief on the contribution, but a tax would be payable on the future withdrawal of funds “.
The capital gains tax invoice is only applied to the “taxable capital gain” which allows certain authorized expenses (the current rate is 33 pc for the property), and your accountant can advise you on your tax return on this and on his schedule, however, I asked pension specialist Mike Knightson, of KM Financial, what other options he would recommend for the sum. Considering your age, conservatism should be at the center of any decisions you make.
“The investment options are sufficiently limited and it is important to note that many life insurance companies will not accept investment funds from clients over the age of 80, unless the investment is carried out jointly with a younger person (under 75). the medium and long-term nature of the funds invested.
“If you’re risk averse, the only options readily available are credit union savings, bank deposits, or mail-in savings. Although they are low yielding, they are accessible and while withdrawals can deplete your principal balance over time, this shouldn’t be a problem if withdrawals are managed carefully.
“Alternatively, if you are a riskier person, you may want to consider an exchange-traded fund (ETF) through a stockbroker or a small dividend-paying stock portfolio, although specific advice is sought before borrowing. this way “.
The only other option that may be worth considering is to re-let the existing unit, but without intervention, through a commercial real estate agency which will take care of tenant visits, auditing, finances. and will simply deposit the income into your account minus their fee.
These services will charge an average of one to two months rent.
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