The boom in recent years in buy-to-let and the surge in house prices has made it increasingly difficult for investors to find a suitable UK property at home where they can get good returns. Investors are now looking further a field to identify properties that have the potential to yield reasonable profits. How is this being Financed?

A buyer could raise a mortgage on their UK property to fund the overseas purchase if there is sufficient equity. The alternative is to take out a mortgage on the overseas property or raise two separate loans – one on the UK property and one on the overseas property. Raising finance for the overseas property can be done with a foreign lender or a UK lender specialising in overseas markets. Borrowing from an overseas bank can have its advantages, as interest rates in the Eurozone are usually lower than in the UK. If the buyer plans to rent in the local currency, then it makes sense to take out a mortgage in the same currency. However, a foreign currency loan means taking on the risk of currency fluctuations unless the borrower pays to fix the forward exchange rates.

Buyers need to be aware that the rules can be different if borrowing locally. There are certain countries that will not take proposed rental income into consideration for mortgage purposes, others will not advance funds to buy or renovate properties that are uninhabitable and in further cases self certification mortgages are not available.

Many borrowers prefer to deal with a UK lender which offers overseas mortgage services as customers benefit from the familiarity of dealing with a UK based lender which will help to navigate them through every aspect of the process.

Please contact us to receive further information on financing you overseas property.

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Overseas Property Investment in:

Cyprus,  Florida, Egypt, Dubai, Spain, Morocco, Portugal, Cape Verde