Foreign Mortgages?

[infoberlin]

Originally Posted by The Soup Dragon

Inforberlin. What you say is true in parts of the world, but not others. For instance, in the UK being a cash buyer only gives you an advantage becuase you can move quickly and (in England or Wales) it ends the chain. People in Britain are well aware of how leveraging can (& does) work in their favour.

well, I believe you´re wrong on several fronts:
a) cash beats in ALL countries, not just England. Nothing beats cash.
b) mortgage requests get turn down mostly because banks cannot verify non-residents "home" income details.
c) I often doubt they realise they are paying a much higher price for overseas properties with the leverage hype.
d) figures are mostly misrepresented because noone takes into account how expensive it is to cancel a mortgage if you want to cancel prematurely and the penalties you have to pay (since this does not fit into the overpriced agency hype).

Good luck to all.

[checkdryne]

Originally Posted by John

Hi Jay, Welcome...

It really does depend on where you are buying (and in some cases even who you are buying off).

From what I see you are hoping to purchase a property for 50,000 sterling with a 50% mortgage of 25,000 and intend to cover the rest with your own savings?

I would say from these figures that no matter what your credit history in the UK, you will have a very good chance of getting a mortgage in many overseas locations.

Maybe you could tell us what locations you are considering? Hopefully then depending on the location, some of our members here with local knowledge can maybe advise about mortgage options available.

One thing I would draw to your attention is that you should be calculating legal and other expenses into your calcuations, these can range anything from 5% to 15% of the property price depending on the area.

Hi,

I'm new to the forum as well as real estate investment. Having read your post, I wanted to make sure I got the bottom line. Are you saying that when an investor has the money/cash to cover the investment overseas, their credit history has no bearing?

[The Soup Dragon]

Checkdryne

I don't think John is saying that in his post. His point is that because you can raise 50% of the purchase price, potential lenders will realise that if you don't meet your mortgage payments they can simply take possession of your foreign property and sell on without losing any money. Because of this many lenders will look more favourably on a poor credit history (if indeed they look at yur credit record in the UK.)

The extent to which they will look favourably on your credit record will vary from country to country and lender to lender.



Infoberlin

A) In the UK (as with most other countries where the property / mortgage market is mature) it isn't the norm to be a cash buyer. Sellers expect to sell the buyers that require finance from a lender. The exceptions to this tend to be for properties for which you won't get a mortgage (property with problems, normally structural, but could be in high rise blocks etc.)
B) Different banks have different affordability criteria. French banks, for example, often require last 6 months payslips. It is for the buyer to determine what their budget is based on their own money and what can be borrowed (for which they should check what they can prove they caan afford.)
C) I hear what you are saying, but it really does depend on the market and how much you are willing to stump up front. For instance, you could buy a property in an emerging market for 70% (or less) of what others will pay if tou stump up all the funds up front before the property is built. Here you take the risk that the property will not be built and you lose everything.
D) By that logic the purchase price is also overinlated due to solicitor fees, tax, etc. Buyers should be aware of the expenses that will be ocured if they pull out / sell on prematurely. There is always a risk that th9is might happen no matter how unlikely they feel it may be.

[The Soup Dragon]

Checkdryne

I don't think John is saying that in his post. His point is that because you can raise 50% of the purchase price, potential lenders will realise that if you don't meet your mortgage payments they can simply take possession of your foreign property and sell on without losing any money. Because of this many lenders will look more favourably on a poor credit history (if indeed they look at yur credit record in the UK.)

The extent to which they will look favourably on your credit record will vary from country to country and lender to lender.



Infoberlin

Taking your comments in turn:
A) In the UK (as with most other countries where the property / mortgage market is mature) it isn't the norm to be a cash buyer. Sellers expect to sell the buyers that require finance from a lender. The exceptions to this tend to be for properties for which you won't get a mortgage (property with problems, normally structural, but could be in high rise blocks etc.)
B) Different banks have different affordability criteria. French banks, for example, often require last 6 months payslips. It is for the buyer to determine what their budget is based on their own money and what can be borrowed (for which they should check what they can prove they caan afford.)
C) I hear what you are saying, but it really does depend on the market and how much you are willing to stump up front. For instance, you could buy a property in an emerging market for 70% (or less) of what others will pay if tou stump up all the funds up front before the property is built. Here you take the risk that the property will not be built and you lose everything.
D) By that logic the purchase price is also overinlated due to solicitor fees, tax, etc. Buyers should be aware of the expenses that will be ocured if they pull out / sell on prematurely. There is always a risk that th9is might happen no matter how unlikely they feel it may be.