What sort of finance should I consider

Gettingtherequickly

Hi

I have the opportunity to purchase a flat in Egypt. At the current exchange rate, I could buy & refurb to my taste for £50k. I have family living there, so maintenance etc will not be an issue.

At the moment, I have approx £20k in savings, so would need finance for the remainder. My mum, bless her, has offered me about £15k, which I don't really want to take, but may consider some of it.

I have sought advice from an IFA, but because the amount involved is quite small, I am getting nowhere fast, so am hoping to pick your brains for suggestions.

Ideally, I would like to borrow £25k, for a max of 10 years, but with no penalty for early repayment. Are there any options out there for me to consider? I can't afford to get on the property ladder here, but this opportunity would give me options later in life.

Any thoughts gratefully received.

Clive_Woody

Depending on your earnings and credit history you might be able to get a loan for £25k and should be able to make overpayments repay early.

People on here normally suggest that you need to be earning double your debt so around £50k salary, assuming no other debts.

If a lender asks the purpose of the loan then may not be overly happy about a property purchase abroad and this could cause a rejection.

Gettingtherequickly

Clive_Woody wrote: »

Depending on your earnings and credit history you might be able to get a loan for £25k and should be able to make overpayments repay early.

People on here normally suggest that you need to be earning double your debt so around £50k salary, assuming no other debts.

If a lender asks the purpose of the loan then may not be overly happy about a property purchase abroad and this could cause a rejection.

Thanks, property purchase attitude is what has been concerning me. Although my salary is not twice the loan amount, I have no debt, so current regular savings would cover the repayment easily. Will just have to keep looking & hoping!

Sarastro

If it's an unsecured personal loan from a bank, they probably won't care that much about overseas property.

Accepting the gift from your Mum might not be a bad thing. It would reduce the IHT liability later on (assuming your Mum has plenty of years left - sorry to be...er...morbid). If you didn't want it as a gift, you could buy the property with her and pay her proportional rent for the amount she owns (so you would be repaying it but without any interest). If you go down this route, it's still your Mum's asset and you might be able to buy her out at a later date in a few years' time if / when your earnings increase.

Either of those will leave you with about £15k to find and you should be able to do that pretty easily as a personal loan or even zero % credit card tbh as you can still get some good deals.

Worth checking your credit score is up to scratch before you embark - they can take a few months to catch-up with improvements. If you get a credit card, ask for an increase in the limit (but don't use it) as the 'unused credit' is a positive factor.

And make sure you keep enough of your savings to cover at least 3 month's salary as an emergency fund.

Could you let the flat out as holiday lets whilst you are not there? Would provide some additional income? Have no idea how that would work in Egypt. Which is another thing actually - don't forget fees and all that jazz - are you sure about the £50k? It could easily turn into £55k! I'd give yourself some contingency.