Mortgages for buying property abroad
Purchasing property abroad is a great long term investment that can continue to pay for itself either in rentals or money saved on holiday accommodation. If you are in a strong financial position and are eligible for a mortgage, purchasing overseas property is certainly an investment that should be strongly considered.
The first step to applying for a mortgage for overseas property is to find a reliable and trusted estate agent in the area you are looking and a local financial advisor. Local knowledge is a great resource to have on your side and anyone with in-depth, day to day experience of the area you plan to buy in should be able to advise you well. It is advisable to obtain financing before you start looking for a property, as you will then be able to determine your budget and know what funds are available to you.
A popular choice for many buyers is to remortgage their own home to pay for property abroad but this can be a risky option, as if financial difficulties should arise you stand a chance of losing your own home as well as your investment property. If you are certain your financial status will remain unchanged or have a large deposit and only need a minimal mortgage this can be the way to go as it means dealing with a financial institution in your own country and being familiar with the laws and legislations surrounding loans.
Obtaining a mortgage abroad is possible and specialist brokers can assist with this procedure. Always check that your broker is reputable because if a foreign broker over sells you a mortgage you have no legal right to contest it and will have to continue with the contractual agreement. Lending criteria and the amount you are allowed to borrow will depend on the country and your financial situation, however since the recession it has become harder to obtain a mortgage for property abroad. The lending requirements are stringently checked and detailed documentation will be required to prove that you can afford a mortgage for the amount you have requested.
Mortgage costs and rates also differ from country to country, so before investing in property abroad check which rates are preferential. Shop around from bank to bank and find the lowest rates and the best repayment terms to suit your budget and make use of a mortgage broker to assist you with this task. If you are purchasing property abroad be aware of the currency utilised for your transaction, as the fluctuating exchange rate can dramatically increase your repayments without any warning. A currency that is equal or lesser than your own countries is always a good investment as you should not be caught unaware of sudden increases.
It is possible to obtain a mortgage from your own bank, in your own country to purchase property abroad, but the options are often far more limited. Institutions that do tend to offer this service generally have their own offices in other countries, so by default a mortgage will still be obtained overseas.
When obtaining a mortgage for purchasing property abroad always ensure that you are aware of all the costs and financial implications, specifically mortgage and lawyer`s fees, insurance and taxes. A deposit may also be required for purchase and in some countries a certain percentage of the total price is required upfront. In certain cases there will limitations on your property regarding letting to tenants, or restrictions may apply if you wish to sell timeshare holidays whilst still repaying a mortgage. Be certain that you have all your facts upfront and have done extensive research before applying for a mortgage for property abroad and ensure your investment is a sound one.