Loan for a property abroad

JohnBravo

Hi All,
I hope you are well.
Would you suggest any good solution for that?
I don't think there is any way to get a mortgage for a property abroad, but I was thinking about financing part of this investment with a bank loan.
Does it make any sense?
Please advise.
Best regards,

TadleyBaggie

JohnBravo wrote: »

Does it make any sense?

Not to any sensible lender it wouldn't.

DCFC79

You would be better off getting a loan in the country you want to buy in.

PeacefulWaters

Do you own a property here?

Is there enough equity in it to purchase the overseas property outright?

Remortgage or further advance with existing lender might be options.

nanny_beach

Will you live in it, rent it out? Depends what country it is in. A lot of people bought "cheap" property in Spain, only to find, it didnt actually have planning permission or the delveoper didnt own the land, and had them demolished. I would seek a solicitor, who is either in the country of your choice, or one here, is completely "up" with all the planning/reg there.

AlexMac

There are lots of options - start at
http://lmgtfy.com/?q=Buying+a+property+Overseas+Mortgage

with a good comprehensive overview at

http://www.which.co.uk/money/mortgages-and-property/guides/buying-overseas-property/

One issue with mortgages in the overseas country is that you'll then be subject to exchange rate fluctuation, as you'll be borrowing in Euros (or whatever) but (unless you are paid in dollars or euros or whatever if you work overseas) paying in pounds. So when the pound drops ion value you pay more; a 500 Euro per month mortgage would have cost you £350 per month in July last year, but about £440 today; a jump of almost a ton!

The suggestion, above, to borrow against your home in the UK is therefore sensible, but there are lots of other factors. We owned a flat in southern Italy for 5 years; really cheap- about £23k to buy, but Ryanair flights, car hire and even restaurant meals went up in price over that time so it stopped being a cheap holiday.

There were other cultural factors too; we were secure in a town, but a majority of other Brits bought isolated country places; and a surprising % got burgled; sometimes catastophically (in one case even ripping out boilers, rads, plumbing pipework and electrical cabling from walls). Maybe related to the fact that the area was very poor, that Brits were seen as fair game, or that they had not paid the local "Vigilanza" security company. As one local friend explained, it's like insurance; they don't really guard your house, just tell the other villains not to rob it!

We were lucky to sell before Italy's continuing recession really stalled the local housing market, and that revealed another factor; the lacl of house price inflation. We only got back what we paid for it. But we did well because the exchange rate had moved our way in that a stronger Euro meant we made a few grand despite there being no uplift in its value. Friends who recently sold in a fashionable area of coastal France found the same; they got less Euros than they'd paid... 12 years previously! Spain has fared worse, whereas some UK property will have doubled in value in that time.

So do the numbers before you buy; our Italian flat (in a 400-year-old stone building) had very low maintenance, tax and utilities costs; but our mates French place probably cost them much more that three or four holidays each year. And after a while it gets boring returning to the same place.

But its your call!

JohnBravo

DCFC79 wrote: »

You would be better off getting a loan in the country you want to buy in.

Do you mean better conditions or a smaller deposit?

JohnBravo

PeacefulWaters wrote: »

Do you own a property here?

Is there enough equity in it to purchase the overseas property outright?

Remortgage or further advance with existing lender might be options.

No I don't so remortgage is out of scope at the moment.
There is about 30% of the equity.

jonesMUFCforever

I would suggest that you are fully committed at present and can't actually afford the property abroad.

JohnBravo

The thing is that I don't want to own a property in this country definitely not in over expensive capital city especially if in 30 years it will look like a Saudi Arabia and I am not talking about skyscrapers.

I am not interested in spending 300k on a mediocre property if I can spend 80k on a 3x bigger property in a 600k+ pop city elsewhere.

Besides such mortgage will take all my savings and the best years of my life.

David555

I'm in the same boat as you. I'm buying a cheap property in Russia £17,000ish at moment. Used all my savings, sold what I could and took out a loan online from my uk bank (Halifax) for the remainder. For me a loan was the only option after selling what I could. I couldn't get a loan/mortgage here in Russia as I'm not a resident and wouldn't have any proof of income here so impossible to get any credit from my research. I got the loan through my uk bank without any issues though there wasn't any option of saying the purpose of the loan was to buy a property aboard so I simply selected "other". As long as you can afford the repayments I'd say go for it. Obviously do loads and loads of research on the property, area etc first if your planning on renting out. I personally wouldn't buy somewhere you've never visited or only visited once or twice.

My wife is Russian so that's a huge help for me and I've been here around 9 different times, often 3 months at a time so I know the country well enough. We already have a place to stay here so the studio flat we are buying will be rented out as a investment property. 2 years down the line I'll probably get another loan to buy a second and so on, in 10 years time we will probably sell them and buy a place in the uk.

Good luck anyway. If you have close friends or family in the country you're buying in that will be a huge help.

Oh and do research on how to send the money aboard the cheapest possible way. using your own bank for example will be one of the most expensive ways. MSE has a good guide if you google aboard bank transfers. I can't post links due to my post count.