FINANCING YOUR PURCHASE
Cash:
Well if you have it great! But do not be too hasty, even huge companies are recommended to have some borrowing. If you want to buy for investment it makes more sense to split your cash fund.
Rather than spending all your £60 000 on one apartment on the beach why don’t you put £20 000 down on 3 and take a small mortgage, make sure any rental will cover the extra mortgage costs. In certain countries you can split the risk & seasonal influence by buying in different areas i.e. Ski, Beach & city. See Investment section for further reading.
Mortgage:
The Mortgage business has grown enormously in the overseas markets but
still be aware some emerging property hotspots are still difficult to
obtain lending in (you might have to form a company & have the company
own the property with you a 100% share owner of this company).
Credit history is not always transferable across borders so you might have
to start from scratch.
Rates are still an issue with Eastern Europe still around 6 to 7% but it’s
interesting to see Czechoslovakia has come down to 4% after a few years.
The laws of repossession still hinder the possibilities of borrowing in
the UK directly to purchase your home abroad. As the main players in the
Banking world own various branches & banks worldwide there not really
that interested to get rates low, the same Bank could be earning 4.95%
in the UK and 6.95% in Bulgaria with effectively money from the same pool.
Be aware of rates, term ( 25 years is not available everywhere) & interest only is still rare overseas.
Bonds:
There has been an alternative to deposits appearing recently, in the form
of a bond.
At the moment its only been associated with certain deals; one off plan
in Morocco for example.
I will be attending a talk by the company issuing these early in 2007 & will
publish my findings then.
Getting a mortgage:
Its not easy sometimes as the criteria can be very strict. Documentation by the case load is not uncommon.Prepare yourself early on, organise your pay slips and/or accounts (mortgages for the self-employed are usually more difficult). Birth & marriage certificates are normally needed. Passports & other ID.
If you need to send originals, copy them first & send by a recorded delivery process.
Rates and loan to values (LTV) change but generally its hard to get over 80% LTV which means you will always need 20% deposit from somewhere.
Complete our mortgage request form as a guide to what you might pay.
Secured Loans:
Ideal for deposits on off plan or quick purchases of cheap property, further
advances on your own mortgage would be a cheaper rate if you have the
time to apply. Redevelopment of an existing building either residential
or commercial can also be funded this way.
Available in the UK, quick decisions & fast funding but secured against your own home so think carefully. For a quote complete the form.
Bridging Loans:
The bridging loans of old were scary things with very high rates and short term availability but now they are an option. Ask for more information & get a quote
