1. Research is key
From tax laws and planning regulations to community fees and utility bills, there’s a lot to consider when buying a property abroad. Your mortgage provider, financial adviser or lawyer may be able to offer help, but even so you should budget more time, energy and additional money than you would for buying a home in the in the UK.
2. Get a good financial adviser on board
Your financial adviser can help with more than just the paperwork involved in buying a property abroad – they can also give you valuable insight into the region and potential pitfalls of local ownership. You should use a lawyer who is familiar with local property law, fluent in the language (and English), and completely independent.
3. Consider the mortgage options available to you
A number of financing options are available to potential overseas buyers, including remortgaging their current property, using savings to purchase outright and obtaining loans from UK or overseas banks. Here’s a low-down on each option:
- Remortgaging your UK home – This can help you raise the funds to buy an overseas property outright. Whether this is a sensible option for you will depend on your personal circumstances – including how much of your existing mortgage you’ve paid off and your current credit rating – as well as factors such as interest rates at the time you apply.
- Borrowing from a UK bank – All of the main UK high street banks have an international mortgage service, but you’ll need to find out which countries they operate in. Banks tend to only provide mortgages for purchases in countries where they have offices. While getting a mortgage in established overseas property markets such as France or Spain might be simple, it may be trickier if you’re looking further afield.
- Arranging an overseas mortgage abroad – Getting a mortgage as a non-resident is possible in more than 60 international property markets – dealt with by specialist brokers. It is important to note that overseas mortgage brokers are not covered by the Financial Conduct Authority, so you would struggle to get any compensation if you were given poor advice
4. You don’t have the same protections as you would in the UK
When you’re buying overseas property, you need to make sure you’ve got the necessary legal protections. Unfortunately, overseas property purchases aren’t covered by the Financial Ombudsman Service or Financial Services Compensation Scheme. You’re reliant on the local legal system and any additional protections your lawyer may negotiate or puts in place for you.
5. Inheritance laws may be different to the UK
You may want to consider drawing up a will in the country you’re buying in to make sure your property is inherited according to your wishes.
6. Be aware of currency fluctuations
If you decide on arranging an overseas mortgage abroad it’s worth bearing in mind that currency fluctuations can impact any currency payment you need to make. If you will be needing to send money overseas for deposit payments or property purchases then ensure that you plan in advance. With the right planning and expert help, you can ensure your move is enjoyable and costs are kept down. Check out Caxton’s International Payments Service for stress-free international payments and transfers.