Buying Property Abroad - Where to Start

Mick73

Hi there,

Back in 2008 I started my one and only thread regarding paying off my mortgage and buying a second property. Well, about a year ago, I managed to fully pay off my mortgage and now own my home outright....woohoo!

My thoughts regarding my original post a few years ago have changed!!!!!

I have been pondering for months about buying a property in either Spain or Florida......different countries for different reasons.....maybe both over the course of a few years.

My *new* question around all this is about starting the process and who to speak to.

My house is probably worth about £300,000 now (only a guessimate by me!) and I thought I could use the equity to buy somewhere. I'm probably a bit thick here as everything I read about equity release says you must be 55 or over....i'm 41. So how do I get the equity out of my home. Do I apply for a mortgage, a re-mortgage, or apply for an overseas mortgage?

Do I get two mortgages, one from my home for a big deposit, the other for the house?

I'm looking at trying to get hold of about £150,000.
My wife and I earn around £60,000 a year.

I am off to 'The Place in the Sun's" roadshow in May and hope to have lots answered then, but my brain is going into overdrive about how I get the money to start it all off so I can sit in the sun!!!

Any help will be lovely
Thank You

Socksey

I got an equity release loan from HSBC some years ago on my paid off house ... Effectively it was a new mortgage and there were no problems.... I was only 30.
Actually thinking about it... it probably will be just a new mortgage and so it may be easier to get it all out of the same pot... otherwise there can be hassle getting a mortgage abroad... (I have one in France too) and just one set of payments may be easier to deal with as you will at least know what you are paying every month and not have to deal with rates of exchange ... etc

Mick73

Thanks Socksey for your reply.


Do you think a UK bank would for example, lend me the £150000 as a total for me to bank until I found the 'perfect' house. Obviously I would start paying it back etc straight away, instead of waiting for me to find a house.
The first way would speed up any negotiations and completion I would imagine

Socksey

You'd have to talk to them, I suppose.... especially if it's a large amount like that.... as I was releasing the equity to invest in a BTL they were quite happy to do it for me.... also I left a high proportion of the equity in the house itself....

Mattygroves2

Think about an offset mortgage. It would give you the cash up front but would limit the interest payable until you found your second home.

kingstreet

This is simply a remortgage of an unencumbered property. Many lenders will have no issues with the purpose of the borrowing, as long as it's a low loan to value and affordability is good.

As Matty said, get an offset and stick the money in there, making it effectively interest-free until you decide to use it.

amnblog

Florida worries me - don't the homes disappear into holes in the ground?

Mick73

Hi there,
Thanks for all the comments above.
I spoke with a broker today just to discuss options. After taking all my details he said there should be no problem getting the £150,000. He said it would probably be an 18 year term as I would be retiring at 60 and this ties in with that date.


He found some mortgages at a rate of 2% which worked out at around £850 max a month. I didn't go into detail with it all to as I was just looking into my options.
I asked about offset mortgages, he said they were pretty sparse now and the rates not that good.


To those in the know, does this sound about right?


Also, he did ask whether I wanted the mortgage against my current house, or an overseas mortgage, all the above was quoted against my current house...not sure if it would be better to look into an overseas mortgage or not??

silvercar

Also, he did ask whether I wanted the mortgage against my current house, or an overseas mortgage, all the above was quoted against my current house...not sure if it would be better to look into an overseas mortgage or not??

Against current house, advantages: In the currency that your earnings are in, easier to arrange , often cheaper rates and more mortgage types eg offset. disadvantage: if it all goes wrong your home here is at risk

stayz

Just really think things over carefully before getting involved with property purchase abroad (i cant stress enough how vital it is that you rent for a good period in the places your thinking of, such cheap rents in these places when your renting long term and the knowledge you gain from mixing within the community will be so helpful to you). Done it myself and lived in a few countries over the years, we are back here again and the property wont sell and there is now sooo... many brits trying to sell too, alot of them are selling at a loss in order to return to the uk. We do get good summer rental from it but the hassle outweighs that, and thats what it is, a massive hassle, its a beautiful place and we go frequently for holidays but they are not really holidays as we are always gardening and fixing things when we go (everything breaks and wears and constantly needs fixing and replacing when it is subjected to the hot temperatures). A place with a pool is always in the dream but people often underestimate the cost of running one and the amount of water they take, they are money pits! I have experienced the expat communities and met so many that have lost their life savings abroad, its been my experience that Brits head for the the dream in the sun and 5-7 yrs is a maximum in a lot of cases until they look for a way back home, often it all gets a bit boring or health issues arise. There is at the end of the day no place like home! Anyway i couldnt help myself commenting like this on the thread, just seen the dream turn sour for too many over the years, however lots are blissfully happy and the dream does remain the dream and we did have some great years abroad but just be really really really careful!!! There are a lot of sharks in the property business abroad, just waiting for the Brit that wants a piece of their paradise that will never be built or that they build and dont own the land it sits on or the property that gets sold 3 times over. Sorry i sound so doom and gloomy, we have some great years living abroad and you probably will too. In my opinion its best to rent out a property in the uk and fund a rental home abroad until you really really know its the life for you.

cns06

Florida has some problems. Firstly visas. 90 days is really your max. You can do a few days in Mexico and do 180 days, but if you do this on a regular basis they are not happy and you cant risk being refused entry if you own a home there. Property prices can vary over time so don't expect any ROI. Other than tourist stuff there is not much to see. There are a lot of very rough areas. Guns and drugs etc. Ok same with all places but FL has more problems than most. The weather can throw problems - houses get wiped off the map.. plus in the summer its very hot and rains a lot. Flights are fairly expensive.


Spain, well its part of the EU, you can come and go as you please, take your car, weather is fairly stable and there are lots of places to see and explore as its a much larger country with islands etc. Prices are also low though and they are going through a tough time.


I would also look at France.


Language may be an issue too?


HTH!