Top tips on securing an overseas mortgage

Are you looking to buy a second property abroad? Perhaps you fancy relocating to sunnier climates that are just a short, cheap flight away? Either way, you’ll be facing the minefield that is securing an overseas mortgage. There are a few options available here, which your current financial situation and country of choice are likely to dictate. You may decide to remortgage your UK home to purchase a property overseas, borrow from a UK bank to buy an overseas property, or borrow from an overseas lender to secure your mortgage. Knowing the best route to take can feel a little overwhelming, especially with each country having its own rules and regulations to abide by.

Struggling to get your head around the abundance of information online? Here are a few top tips to help you along the way to buying that dream home abroad…

1. Research the local customs

How stressful an overseas house purchase will be is very much dependent on the country you choose to buy the property in. For example, if you’re buying from the UK, Spain and France are relatively simple but countries further afield can result in a lot of extra paperwork and box ticking. You’ll need to do the groundwork here with your research and if possible, speak to someone who has been through the process themselves and can offer guidance and a heads-up on the challenges that you may face.

2. Choose a lender

Once you’ve made a firm decision on the country you’ll be purchasing a property in, if you’re in need of financial assistance to complete the sale, you will need to decide on a lender. This is where it gets a little trickier as overseas mortgages aren’t always as straightforward as you’d like. Unfortunately, you can’t use a standard UK mortgage to buy a property outside of the country, so you will need to consider applying for a specialist loan from a UK provider or seeking an overseas lender. Note that not all UK lenders will provide funds for all countries.

3. Consider remortgaging your home

If you’re struggling to secure the funds you need in order to make your dream property purchase abroad then remortgaging your UK home is an option to consider but only one that should be decided with the utmost confidence. Whilst it could provide you with the equity you need, you also don’t want to risk your hard-earned cash and dice with uncertainty.

4. Make yourself attractive to lenders

In order to be in the best possible position to obtain a second mortgage you’ll need to look attractive to potential lenders. Ideally, you’ll have been in your current employment for at least 12 months and you may even be asked to show your CV for proof of job experience and history. If you’re self-employed it might prove a little harder, you’ll need to have at least 3 years of trading history and a minimum of 2 years accounts showing a healthy profit.

5. Consult a local lawyer

When buying a property abroad, it’s vital to consult a reputable English-speaking independent lawyer who can help to guide you through all the legalities and paperwork. Ideally, choose a lawyer who isn’t too local to the area you’re purchasing a property in to avoid any bias. Construction issues can cause problems down the line, so you’ll need to also obtain a valuation and survey from an expert in the country. As a basic rule – don’t take any shortcuts as it simply won’t be worth it.

It might not be a simple process but follow these top tips and you’ll be in your new home and enjoying the sun before you know it.

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