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Overseas Mortgages
By Mark Nichols
Jul 6, 2008 - 11:43:06 AM
Deciding to buy a property can be a stressful task at any time, but deciding to buy a house overseas can seem like having a nervous breakdown. It doesn’t have to be like that, not if you take the time to research where you want to buy, what type of property you want and what is the best way for you to pay for it prior to you committing yourself to a purchase. Personal taste, hopes and aspirations will be the driving force for where you buy and the type of property you decide on, but what do you do about the finance? This is where specialist advice can help by covering all the options available. Over the past 10 years the overseas mortgage markets have grown considerably. It was not that long ago if you wanted to buy overseas your only option was to raise the money in the UK by either personal loans or secured against an existing property. Across the world lenders have opened their doors to providing mortgages to non residents of their counties to purchase holiday homes and investment properties. The mortgages provided by lenders in countries outside the UK may not be as numerous or as flexible as those available in the UK but the products over the last few years have grown up fast, with product starting to resemble those available here. Competitive interest rates, self employed products, interest only products and the ability to borrow between 70% and 90% of the property value have meant considering an overseas mortgage a great viable option for a lot of people buying overseas. Having “the cheapest rate” is not always the only reason for choosing a particular mortgage, you need to consider the fees associates with the mortgage from the lender and possibly fees from places like land registry which may be higher if you have a mortgage, redemption fees for the mortgage you choose should you wish to repay the loan, how you will make the repayments and the implications of currency fluctuations on those payments and where you would prefer to have the bulk of your equity in property, in the UK or overseas. There may even be tax advantages having a mortgage on the property overseas. It is only after careful consideration of the entire options can an informed decision be made as to what is right for you. So what can you expect to see available from banks offering finance to non residents. Let’s look at a few of the current leading hotspots. SPAIN: here the lenders have taken the initiative to look at the UK market and have developed products very similar to those available here, the Spanish market place has benefited from a long love affair with the UK public. Mortgages are available for purchase up to 90% of the property value and you can re finance an exiting property for up to 75% of the property value releasing equity for anything you would like to do. Interest only is available for the term of the mortgage and products are available with minimum paperwork requirements. Initial rate’s start from as low as 4.61% FLORIDA: even with the current credit crunch in America the banks in Florida are still offering some flexible products with mortgages available for house purchase up to 80% of the property value (75% on the basis of low documentation)., options to have interest only and a choice of having the mortgage in Sterling or Dollars. Initial rate start from 7.00% variable in Sterling and 7.87% for a 5 year fixed rate in Dollars. ST LUCIA: Not as many choices in products available but its still possible to fund up to 70% of the property value on a mortgage. There are no low document products available here, Up to 5 years interest only and initial rates starting from 7.20%. If you have equity in your UK property it is a consideration when deciding on the best way to fund you dream home purchase however you can not discount the option of looking at overseas finance as the way to buy your piece of the sun, which is the best for you can only be established by investigating all the available options and it is always wise to seek specialist advice early in your house hunting adventure.
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