There are many good reasons to invest in property overseas. You may want to use the property as a vacation rental or as a vacation home for yourself and your family. Your child may be going to university overseas, and you may be thinking about buying a property as an investment where they are studying. Getting a mortgage for an overseas property is different than getting a mortgage in your country of residence, however, and there are some things to consider.
Hire an Expert
Even if you are experienced in buying real estate, the rules are often quite different when it comes to buying overseas. The best thing to do would be to find a local real estate agent in the country where you want to buy, who is experienced when it comes to dealing with overseas buyers. By working with a local agent, you can better understand the local laws and regulations when it comes to home purchasing and financing.
Getting Financing is Challenging
Obtaining a mortgage for an overseas property can be challenging. If you have a credit score from a foreign country, it won’t be counted overseas. You will have to obtain a mortgage from a bank in the country you are purchasing in, and the application process will be similar to that in your home country. You will still have to prove income and provide all other supporting documents. As a foreign buyer, you will likely be unable to get low mortgage rates.
Experts recommend you buy your first couple properties overseas outright, as it is unlikely you’ll be able to get a loan. Once you have a bit of a portfolio overseas, it will be easier to get a loan for future purchases.
You Can Leverage Your Current Property
While it’s difficult to get a mortgage from a foreign bank, some homeowners use the equity on their current residence to finance a purchase overseas. Speak to a mortgage broker about obtaining a home equity loan or refinancing in order to finance an overseas’ property. Refinancing can be tricky, so it’s best to seek the advice of a professional.
Buying a home overseas can be very rewarding. If you choose to use it as a holiday rental, you can make a good income. If you are moving overseas yourself, it’s a great investment and a good way to diversify your portfolio. While it is more difficult to get a mortgage and to get low mortgage rates overseas, it isn’t impossible. Of course, your ability to find low mortgage rates will differ depending on where you are buying. If you are considering buying a property overseas, contact one of our mortgage experts today for more information and advice!