If you live in the US right now you may have noticed that the real estate market is a little sluggish (understatement!) – and if you live in the UK right now you may have noticed that everyone seems to want to sell their home to realize the significant amounts of equity that they have accrued over the last ten years or so when the market was riding high.
The unfortunate truth is that neither the US nor UK property markets are heading for a positive upswing again any time soon and so you will just have to ride out the stagnation period and put up with it…or, you could sell out now, get out now, avoid the boom bust cycles and the boring day to day talk in the office or at the pub of house prices, crashing markets, mortgage interest rates and how much your neighbour managed to add to the value of his home with that tasty bathroom upgrade!
What am I talking about – well, I’m talking about moving overseas and exploring new and international real estate horizons basically!
The US and UK housing markets are in a cycle all of their own and the whole world isn’t affected no matter how much we Brits and Americans like to think our nation’s are the only ones on earth occasionally – usually when we’re winning at international sport!
But to get out and buy real estate overseas for retirement, for a whole new life abroad or just as a vacation home requires financing…those who sell their principle residences and quit their country altogether may be happy to place all their money into a new home, others may not be so quick to commit all their savings though. And of course others of us will require some form of mortgage to buy our overseas real estate…so how on earth do you get a mortgage when you live in one country and want to buy a house in another country?
It’s actually quite simple. There are three or four main ways of getting mortgages to buy overseas real estate and they are: –
1) Re-mortgaging your current home – as with all real estate finance options there are upsides and downsides to this particular path. This path is best taken when you have significant equity in your current property that you can release to buy a home abroad – but it does mean your home overseas will effectively be secured on your principle residence. You need to consider that fact carefully, you need to consider interest rates as well as your long term ability to afford to keep up mortgage payments too – because you don’t want to default, risk losing your home and ‘just’ having your overseas property safe if you only want to vacation in it!
2) Getting a mortgage from a lender in the country in which you’re buying real estate – many nations in the world have sophisticated and mature mortgage markets where banks and lenders will lend on property to citizens of any nation as long as they meet various criteria such as financial stability and the ability to make a certain percentage of the asking price in the form of a down payment. Arranging a mortgage locally can also make sense as the mortgage will be in the currency in which the property is being sold and will of course be secured on the real estate overseas.
3) Getting a mortgage from an international lender – some international lenders have a presence in both your country of residence and the nation in which you’re thinking of buying a home. This is incredibly convenient – it can mean you are able to put all your banking and finance affairs in the hands of one company thus streamlining your finances, it can mean the lender in questions understands both your needs and situation as well as the local laws and ways of doing business overseas thus making it much easier for you to buy abroad and working with such a lender can also reduce currency fluctuation risks when you transfer the deposit and monthly mortgage costs.
4) Approaching a broker – if you think all of the above methods are too messy or confusing for you to get to grips with there is one other alternative you may like to consider. That is using a broker who can assess your situation, requirements and options and go out and find the best deal for you. MLB중계