Here you can find information on how to finance a property purchase abroad, from taking out a mortgage overseas to remortgaging real estate in the UK.
What is an Overseas Mortgage?
A foreign mortgage means a mortgage on a home that is not located in the UK. Consider a home mortgage overseas if you are buying a vacation home, moving to a warmer climate, or – a growing trend – buying your first home abroad, because you don’t can afford to buy in Britain. You can get a mortgage abroad through a British bank or an international lender. It is also common to get the funds by remortgaging in the UK. Here are the pros and cons of each option.
Remortgaging of a British home to buy property abroad
A UK home remortgage can help you raise the money to buy your home abroad. If this is a sensible solution for you, it depends on your personal circumstances, including the amount of the existing mortgage you owe and your current credit rating, as well as factors such as interest rates at the time of the application.
Credit from a British bank to buy property abroad
Some large British high street banks have international mortgage services, but you need to know in which countries they are active. Banks generally buy mortgages only in countries where there are branches. While getting a mortgage in foreign real estates markets like France or Spain can be easy, it can be trickier if you look further afield. Although the mortgage can be set up through a British bank, it will have to deal with the Bank’s foreign branch once the mortgage is established.
Arranging a mortgage abroad
According to Jamie Milton from Valuvillas, It is possible to liquidate a mortgage with a foreign lender with the help of a special broker. These brokers can provide you with personalized information, including a list of brokers or lawyers that you can use in your chosen country. In some parts of the euro area, mortgage rates are much lower than in the United Kingdom, especially in established real estate markets where there are large mortgage lenders, who get a better deal through foreign loans. However, foreign mortgages are not subject to the Financial Conduct Authority and therefore it can be difficult to get a refund if you are given the wrong advice. The consequences of foreign currency lending must also be taken into account.
Deposits in foreign assets
The deposit required for a foreign mortgage is usually higher than would be required for a general mortgage in the UK. In Spain, it is common for foreign buyers to pay 30-40% of the price of the property in advance. In some countries the deposit is non-refundable, so do not send money to negotiate the initial contract, and without the go-ahead from a lawyer or broker.