Overseas Spanish Mortgage....
For most people investing in a property
abroad, an overseas mortgage is required to finance the purchase of the
property. As with your own home, borrowing money on a mortgage to purchase
your holiday or second home is a serious business. Many people often
locate a property they wish to buy without first looking in to the cost of
finance and the often high associated purchase costs. What ever type of
property you are interested in purchasing, finding our your costs and how
you are going to pay for them should really be the first step in acquiring
your dream holiday property.
An overseas mortgage, quite simply is a mortgage for a property that is
located outside of the persons normal country of residence. Although
mortgages are usually available in the country that the purchase is being
made, most people find it easier dealing with banking institutions that
speak the same language. In fact most expats that have lived abroad for a
few years, still prefer to have their banking arrangements taken care of "
back home"
Whereas a few years ago obtaining a
foreign mortgage was neither cheap nor easy, nowadays most banks and
lenders are able to discuss such a loan, particularly for people that have
built up substantial equity within their homes. Application forms are
readily available on the Internet and you should not have too much trouble
in locating a suitable deal
All mortgage lenders where ever they are
based, go through a similar process before they will lend you money on an
overseas property. The lender will need to check your financial status and
your ability to service any loan. Other checks include your residency
status, your tax position and of course your income.
The property will also have to have a valuation on it to make sure that is
a reasonable prospect for the advancement of funds. Like with most
financial enquires, it pays to shop around. The internet is a good place
to start with many companies now specialising in overseas mortgage deals
with a variety off plans on offer including interest only and fixed rate
deals. Lenders will not just consider applications from persons wishing to
finance a holiday or second home, there is now a very healthy and
established buy to let mortgage market, particularly in Spain and many
people are buying property with a view to long tern rental.
Whatever deal you decide to accept , it
is of paramount importance that you know exactly the type of deal you are
signing up for, make sure that you are fully aware of any penalty fees if
you decide that you want to change mortgages or pay back the loan early.
This is perhaps one of the advantages of using an overseas mortgage
broker, they are able to point out to you all the differences between
contracts and help you pick the one that is most suitable for your needs.
What ever type of overseas mortgage you decide to settle on, it will of
course be subject to you arranging suitable insurance to cover the
building against a wide range of insurance perils such as fires and floods
etc. Whereas as in the United Kingdom, you may find a lender keen to
arrange home insurance for you from their own panel of insurers, most
lenders are not to keen to arrange insurance for buildings in foreign
countries. You will have to visit a specialist provider for this cover but
it is still fairly easy to obtain and you can expect to receive a wide
policy wording that covers most of the usual perils. Insurers will take
care of local covers form you but you may find that in some countries with
a history of flooding or earthquakes , that cover is restricted or with
require an additional premium to be paid.
