There has been a huge rise in the number of people who own property abroad. Whether it's for a family home, a vacation home, a place to retire, or an investment property, the market shows no signs of slowing down.
In the excitement of making the decision to move forward, it's easy to forget how important it is to get legal advice from a professional.
Property and mortgage laws in other countries are very different from those in the UK. Local ways of doing things, customs, and laws are very different from one country to the next. People who buy property outside of the UK often make the mistake of thinking that everything will be the same as in the UK. This can be a rude awakening when they find out that the legal system is very different. Television shows have shown that it can be hard to prove who owns a garden or that there is no planning permission or a plan for a three-lane highway to go right through it.
It doesn't have to be this way. Expert advisers can help buyers find their way through the confusing process of buying property abroad and help them get independent and specialised advice from professionals like surveyors, architects, and the all-important solicitors.
As for how to pay for the purchase, most people think about getting the money from an existing UK property or getting a mortgage from a foreign lender using the foreign property as security.
If you already own a home in the UK and want to buy an overseas home as a vacation home or investment, the easiest way would be to get a loan against the equity in your home. By letting go of this equity, you would be able to finish any deal quickly.
You might also be able to get a better interest rate if you raise a mortgage on the property you want to buy overseas. With this option, the legal title of the property would be checked by the lender. The lender would also make sure that all other parts of the purchase were in order, such as registering the property in the buyer's name, getting an appraisal, and checking any building permits, rules, or regulations.
Most of the time, interest rates in Europe are lower than in the UK. Because of this, most people who want to buy Spanish property are told to get a mortgage in euros, even though you could technically choose any of the major currencies. If you want to buy a home in France or Italy, you need a Euro mortgage.
Euro mortgage repayments must be in euros. There will be some changes in the value of the currency, and you should plan your monthly payments with this in mind.
Your adviser can help you figure out which mortgage is best for you. For example, if you want to rent out your Spanish property through a Spanish agent, you will get paid in euros. The rent can be put into a Spanish bank account to help pay the mortgage. This way, there won't be any currency fluctuations when the money is transferred each month. In this case, it makes sense to get a mortgage in euros.
If the property is only for personal use and there is no foreign income, you could avoid the problem of the currency changing by getting a mortgage in pounds. But because you save money on interest rates, a Euro mortgage is still a good idea.
We strongly suggest that you get help from the experts if you need help with mortgages in other countries. You can find a broker online, and their knowledge of the whole foreign property market will be very helpful.
