Can mortgage lenders consider property I own abroad?

Bobby1955

Hi everybody,
I hope there are people here that can give some advise or point me in the right direction:

My mother has offered to transfer two of here single apartments that she owens on Germany (Freiburg) to my sister and I so we would each be legal owner of a flat worth €60k. This would enable my sister, who lives in Germany, to use it as a equity against a mortgage whilest my mother would still be able to get the rental income for the flat.

Since my partner and I live here / want to buys here I need to find out whether mortgage lenders would accept equity i own abroad when calculating the deposit we need.

We have started saving for a deposit last year and have forecasted that we need at least 3 years to save enough deposit for a 3 bed room house (North London).
However, if a flat could be taken into account as well we would be able buy in 2014 already.

Another option my mum has suggested is that she would sell one of her flats and shares the money with my sister and I, giving all of us roughly € 20k cash (-cost of selling). This however would mean that she loses the rental income for one of the flats and for my sister it would mean that she would only have a very small deposit. Since she had two children already and they live on one income they don't have enough money to save up for a deposit.

I know, my mum is a great woman :T

getmore4less

You generaly can't even use equity on a second property in the UK for a loan on another so one abroad will be another no no.

Even if you could you still have to borrow the money(this must be the same in germany) to buy a new place so need to be able to afford the payments just reduces the deposit requirement on LTV.

the normal way is to mortgage the place you want to use yo release equity for the new place you want to buy.

you would also need to look at the tax implications of the rent if you own the property it is your income.

Bobby1955

Thank you very much.
We had hoped that it could work similar to Germany where a bank has proposed to take the value of the flat ( €60k )as security / deposit for a new build house (value €240k representing a LTV on 75%) and they will also cover the buying costs so a total financing of roughly 110%.