Mortgages for expatriates

More and more people are looking into purchasing real estate in places other than their home country, as primary residences, as vacation homes that can also be used as a vacation rental when they are not in residence and as income producing homes “buy to lets” also known as rentals.

It seems that International buyers are currently dominating Europe’s higher end market as opposed to domestic clients. In days gone by, owning property in another country was reserved for the elite or “the jet set”. Now home ownership in Europe is not just for the wealthy, it is for anyone who can get approved through the buying process.

The legality of purchasing real estate, the buying procedures, how fees are calculated, what is included with a home and how buyers are represented is different from country to country. The fact that there are more laws protecting consumers in some countries, lends to the attitude of "buyer beware" which is still very much in existence throughout Europe. So you should exercise even higher caution than you would a purchase in your home country.

Just because you want to purchase real estate does not mean that it is legal or easy to do so in every country. For example, under the law in Thailand, foreign nationals (even if married to a Thai person) are not allowed to own land. However, they do have the right to own a building such as condominiums, This ownership is granted under certain stipulations, such as the percentage of foreign owned units compared to Thai owned units can not exceed 49%, however there are even exceptions to this rule.

In India, a foreign national of non-Indian origin that resides outside India cannot buy property. It is against the law for foreign nationals to own property in India until they have complied with the residency condition of 183 days in a fiscal year. In addition, real estate cannot be purchased jointly in the name of one eligible person with one non-eligible person. That means a non-resident Indian or foreign national of Indian origin cannot buy a property jointly with a foreigner, even if they are legally married.

In Europe, each country has it’s own regulation as to ownership of real estate. In the US, land ownership is not restricted by your nationality, however, there are other laws that may apply when you become a property owner. So as you can see, the ownership of land is extremely different from one country to another.

Financing property in other countries is as varied as the ownership itself. Some countries, such as France, require that you have an account in one of the country’s banks before you can obtain a loan or purchase property in their country. In Thailand, foreign nationals until recently, have been unable to borrow money for property purchases. However, times have changed some and loans are looked upon as a way increase Thailand’s economy. The banks in Thailand are seeing this type of investment as an opportunity and no longer only seeing foreigners as a credit risk. Even with these changes, 50 percent of the mortgage is usually all you will be able to finance.

One of the most competitive mortgage markets in the world is in the UK. Mortgage rates and fees are generally lower than the offshore banks that deal with real estate loans. However, some UK lenders will only let foreign nationals obtain a loan for a “buy to let” (rental) property, because it is considered a commercial transaction and is unregulated by the Financial Services Authority (FSA). Having said that, in order for a foreign national to obtain a mortgage, the UK lenders require a UK work permit. A permanent right to reside in the UK is also helpful but not required.

UK expatriates purchasing in countries such as Austria, Belgium, Finland, Germany, Greece, Italy, Netherlands, Portugal and Spain, will generally find that the local banks can offer a much better interest rate than the UK banks. For example, in France, the rates on mortgages start at 3.45 per cent, and in Spain 4.50 per cent in Portugal 4.40 per cent. You may receive a much lower interest rate, however, a lot of European lenders generally require a deposit of 30 percent of the mortgage value and the period that they will finance in most cases is usually much shorter than a standard mortgage.

Another form of financing is offshore mortgage lenders, international finance brokers and other specialist that work with expatriates wishing to obtain mortgages. They offer assistance with obtaining real estate loans for those living around the world. If you do use such a company, you need to make certain they have the correct credentials and are regulated by the proper authorities, such as the FSA in the UK or the individual States Attorney Generals offices in the US. You also need to understand what cost you may run into as their rates are usually less competitive with higher interest rates and fees.

There are a number of reputable banking and mortgage companies that offer mortgage loans to foreign nationals and expatriates alike. American based Citibank, which is one of the largest full service banks in the world. UK based banks HSBC, Royal Bank of Scotland Int., (in the top ten largest banks in the world) Lloyds TSB, Barclays, Somerset Mortgage and Switzerland based USB, are just a few of the banks and mortgage companies that deal with this type of lending.

If you do decide to purchase real estate in another country, don’t get caught up in the moment and forget to use some common sense. First, find a broker that you are comfortable with and that is a professional in the real estate market you are looking to purchase in. Make sure you understand the ins and outs regarding the purchase of real estate in the country you are looking. Once you have found the property that you are interested in pursuing, have an attorney look over everything BEFORE you sign any paperwork. Get your financing in order and have an inspection done on the property.

by a http://www.valuably.com writer


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