by Stephen Burdett Cert PFS DipFA, MBL Financial
With global interest rates at an all time low and international real estate prices at rock bottom, has there ever been a better time to buy a property? There is a common misconception that as an expat living overseas, it can be almost impossible to get a mortgage, especially in the current economic climate. The reality is that the opposite is the case. Several major UK banks have international subsidiaries providing the internationally mobile expat with a range of services, including mortgages for an investment property or a holiday home overseas.
Available in a range of currencies and for properties in most developed countries, including Australia, New Zealand, the USA, Canada, Hong Kong, Dubai, the UK and Europe, mortgages are being offered at rates from as low as 1.69%.But what about a deposit? Following the aftermath of the recent banking crisis and the issues that came out of the woodwork with revelations of banks poor credit policies, lenders have been forced to tighten their qualifying criteria. However, most see this as a return to the norm of traditional lending policy, such as the requirement for a 30% deposit. However, it is possible to use equity in an existing property or investment portfolio and mortgages are available for up to five times income. Some lenders will also use to 50% of any rental income too. Interest only mortgages are also available, particularly useful for investment properties or for tax and estate planning.
Obviously there is a lot to consider when buying a property outside of your home country and you should be careful to make sure that you get all the appropriate professional and legal advice as well as a survey. Although it is possible to make a quick profit, if you are buying a property as an investment it should be seen as a long hold and always take into account the relevant taxes and fees whenever you buy or sell. If you plan to rent your property out and use the rental income to cover your mortgage, be sure that you can still afford your repayments if the property is not rented out. Remember, your home is at risk if you do not keep up the repayments on any loan that is secured against it.
So if you are thinking of buying a home back home or overseas, you may be surprised how easy it is to take advantage of the current downturn in the property market and low mortgage interest rates.
About the Author
Services include: international mortgages, savings, investments, pensions, life cover, income protection and bank accounts.
Licensed and regulated international financial advisers.
Licensed by the Financial Supervision Commission of the Isle of Man.
Registered office, 20 Finch Road, Douglas Isle of Man IM1 2PT