If
you have the funds, obviously you can just pay cash.
Unfortunately, few of us are
in this enviable position.
Otherwise
you will have to borrow to finance your purchase.
You have several options.
FOREIGN
MORTGAGES
One
option is to apply for a foreign mortgage
secured on your home abroad, in
the local currency.
All mortgages in Europe will be
full status-
you will always need full proof of your income, and you will need
a
bank account in the country of purchase.
Click
to find out about opening
a bank account abroad
Typical
documents you will require when applying for a foreign mortgage
are:
- 3
months bank statements
- 3
months salary slips
- P60
- 3
years accounts if you are self employed, or a director of a
company
- 3
years self assessment tax returns
- Passport-photocopy
of photo and personal details
- birth
certificate
- marriage
certificate (or decree if divorced)
- credit
card statements
- mortgage
statement
- proof
of your deposit
If you hunt these documents down
in the early stages of your search
you will avoid a desperate rush
if you suddenly want to move fast.
It is even possible to get a loan
agreed 'in principle' before you buy.
RE-MORTGAGING
YOUR UK PROPERTY
If
you have sufficient equity in your UK home,
you can arrange to re-mortgage this.
You then use the money to pay for
the foreign home in cash.
Or
you can extend your UK mortgage just to raise the deposit not
covered by a Spanish or French mortgage, or to finance renovations.
This
is a fairly straightforward process.The repayments can't fluctuate
because of currency swings- although
they can if the interest rate changes.
If your situation leaves a foreign mortgage unavailable a re-mortgage
may be the answer.
Lending
institutions seem to be falling over themselves
to offer us better and better deals,
with lower and lower costs.
We have tried to find a good company offering
secured loans and re-mortgages which can be used to
fund your foreign property.
We cannot find a secured loan at a better rate-
and the site is very easy to use.
Even
if you are applying for a foreign mortgage
a secured loan is one way to raise the deposit and other costs.
Whenever
you take out a secured loan or re-mortgage
you are increasing the debt on your main home.
If your circumstances change,
YOUR MAIN HOME COULD BE AT RISK
so do your sums carefully.
STAGE
PAYMENTS
If
you are buying a home off plan, or having a home built,
you can often only get a
mortgage once the property is complete.
You will have to make other arrangements
to finance
stage payments to your developer.
This is another situation in which a re-mortgage may be useful.
BUY
TO LET
You
may be planning to rent
out your property-
but buy-to-let mortgages are unlikely
to be the answer.
They are only available if you are
letting on 6 month contracts-
meaning someone is living in the house
long term- so you can't use it yourself.
Projected
income also has to cover at least 130% of the mortgage payments.
If
you plan to help cover the French or Spanish mortgage payments
by taking holiday lettings you
cannot take this into account when
working out how much you can borrow.
The virtual non-status mortgage [see above] may be worth investigating.
TOP
TIP
