Foreign Mortgages New Horizons

Foreign Mortgages .​
New Horizons?
There has been a​ tremendous boom in​ overseas property ownership .​
Whether for personal use as​ a​ family,​ holiday or​ retirement property or​ as​ an​ investment property,​ the​ market shows no sign of​ slowing down.
In the​ excitement of​ making the​ decision to​ go ahead,​ it’s easy to​ overlook the​ importance of​ taking professional advice with regards to​ the​ legal situation.
The law in​ respect of​ property and mortgages abroad is​ very different from that in​ the​ UK .​
Local practices,​ customs and regulations are very different and vary from country to​ country .​
One of​ the​ most common mistakes made by people purchasing overseas property is​ to​ assume that everything will be similar to​ the​ UK and there can be nasty shocks in​ store when the​ reality of​ the​ very different legal system strikes them .​
Television programmes have highlighted problems in​ proving ownership,​ lack of​ planning permission or​ plans for three lane highways cutting virtually cutting through the​ garden.
It needn’t be like this .​
Expert advisers are in​ a​ position to​ guide buyers through the​ maze of​ foreign property purchase and to​ help them to​ get independent and specialized advice from professional people such as​ surveyors,​ architects and the​ all-important solicitors.
As far as​ financing the​ purchase,​ it​ is​ usual to​ think about either raising the​ money on​ existing UK property or​ alternatively to​ arrange a​ mortgage using the​ foreign property as​ security,​ via an​ overseas lender.
Assuming you​ own property in​ the​ UK and are buying your overseas property as​ a​ holiday home or​ investment,​ the​ easiest route to​ take would be to​ arrange a​ loan on​ the​ equity in​ your home .​
By releasing this equity you​ would be able to​ complete any deal without undue delay.
Alternatively,​ it​ may be possible to​ get an​ improved interest rate by raising a​ mortgage on​ the​ overseas property you​ plan to​ buy .​
There is​ an​ added advantage in​ this option,​ in​ that the​ legal title of​ the​ property would be checked by the​ lender,​ who would ensure that all other aspects of​ the​ purchase would be in​ order,​ such as​ registration in​ the​ buyer’s name,​ valuation and checking of​ any building certificates,​ regulations and planning permissions.
European interest rates are generally lower than those in​ the​ UK .​
Because of​ this,​ with Spanish property,​ most buyers are advised to​ take out a​ Euro mortgage,​ although technically you​ could choose all major currencies .​
If buying property in​ France or​ Italy then a​ Euro mortgage is​ required.
Euro mortgage repayments must be in​ euros .​
There will be some currency fluctuations and this should be taken into account when planning your monthly repayments.
Your adviser will be able to​ help you​ with the​ choice of​ which mortgage is​ for you​ .​
For instance,​ if​ you​ intend to​ rent out your Spanish property via a​ Spanish agent,​ any income will be in​ euros .​
Rental received can be paid into a​ Spanish bank account to​ help to​ fund the​ mortgage repayments,​ thus avoiding any fluctuation in​ currency when transferring money each month .​
Obviously in​ this case a​ Euro mortgage makes sense.
A sterling mortgage would avoid the​ fluctuating currency problem if​ the​ property is​ purely for personal use and there is​ no foreign income .​
However,​ the​ savings on​ interest rates still make a​ Euro mortgage an​ attractive proposition.
For help on​ overseas mortgages,​ we strongly advise you​ to​ take some guidance from the​ experts .​
This can be found by going on-line to​ find a​ broker,​ where you’ll find their knowledge of​ the​ whole foreign property market invaluable.

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