An international mortgage can mean different things to different people.
- Buy a property to live in, in the country where you have moved to
- Raise capital on a home that you own in a former country you’ve lived in that you intend to keep
- Raise money on a home you own in your country of origin
- Purchase or remortgage a buy-to-let property in any country
- Purchase a commercial property for your business to expand into a new country
- Why Research is Key
Irrespective of your needs, it is important that you consider all aspects of purchasing with a mortgage or remortgaging your property. Involving and seeking advice from the right people is a must, including financial advisers, solicitors, real estate agents, surveyors, architects and maybe even government departments – the list is not exhaustive.
Research is the key: you cannot do too much research before you embark on a mortgage or remortgage.
There will be considerable differences between how mortgages work from country to country, so it is important that you obtain the right advice from the start. Don’t just assume they work in the same way as your country of origin. You will almost certainly need a substantial deposit, especially after the banking crisis of a few years ago. Lenders are, on average, looking for a commitment from you of about 25% of the purchase price – usually as a cash deposit. Sometimes, this deposit is greater than 25%. There may also be a restriction on how long you can take the loan for, for example 20 or 25 years.
You’ll need to consider the currency in which the mortgage is paid. This is usually the currency of the country where the property to be mortgaged is, but some countries’ lenders allow you to pay the mortgage in a more favourable currency – for instance, if your employment is transient and your salary currency varies.
Understanding the laws governing the country in which you want to purchase is paramount and this is where an experienced international mortgage adviser can help considerably.
You will also need to consider employing a translator both for verbal conversations with officials and professionals and for documents that have to be created in a foreign language. Signing for something you don’t fully understand is, without doubt, foolhardy.
There will undoubtedly be insurances to consider, some compulsory and others, although they may look optional, it would be wise to take.
Great care is also needed if you are purchasing a new build from a property developer. Has the developer used the building as security for its needs and if so will the debt belong to you on purchase? Without proper due diligence and good legal representation you may be in for a nasty surprise.
Other points to consider are the effects on any death taxes back in your country of domicile. Would there be a need to amend your Will and, if you haven’t got a Will, to make one?