Many people in the UK are seeking a better life abroad, whether it be in Europe, Australia, the USA or somewhere like South Africa. These people are drawn to better climates, a better standard of living, more job opportunities, richer cultures or simply a nice place to retire.
Some lucky people who are looking to move abroad (particularly retirees) will have savings, or possibly a mortgage free home to sell and use the cash to buy a home abroad outright. Others though, (particularly those of working age) will need to get a mortgage on any home they wish to live in. Unless, of course, they are renting.
Below are some tips for getting a mortgage abroad:
- There are several ways to obtain a mortgage for foreign property. You can remortgage your existing UK home to raise enough equity to buy a foreign home, or you can apply for a mortgage from a high street bank to buy abroad, or alternatively you can go to a specialist broker for an overseas mortgage.
- UK/Spanish bank Santander offer mortgages for buying in Spain, while Lloyds TSB and Barclays lend for home purchases in the main Western European countries (France, Spain, Portugal and Italy) as well as countries like South Africa, Dubai and the US. Because of the pedigree of these lenders many buyers prefer to approach such institutions as a first step in their search for the best financial solution available.
- Smaller or more exotic countries are harder to get mortgages from a mainstream bank for.
- Homeowners must be aware that unlike high street banks who lend overseas mortgages, international mortgages brokers are not covered by the FSA, so you cannot seek recompense if you are mis-sold a mortgage, or unhappy with the service in any way.
- If you are getting an overseas mortgage, know the laws in your destination country – some countries have different regulations for non-citizens than for citizens. Do your homework, and find out about the local real estate market, procedures, house prices, and what you can expect when taking out a loan from an overseas lender.
- Stage Payments – if you purchase property off plan you may have the option to pay for your property via a series of installments that you can save to fund during the build period. You will be required to pay a securing deposit up front and then your installment dates and amounts will be written into the contract enabling you to budget accordingly. Clearly this method would particularly suit those with a high level of disposable income.
- As with choosing a mortgage in any country, shop around for the best deal. Make full use of the internet, use Google, use forums, expatriate and international property sites. Also examine the lenders’ sites themselves to study what they offer and their terms and conditions.
- Listen to personal recommendations from friends, family and colleagues who have already undertaken international property purchases.