Buying a property overseas can be a wonderful financial investment or a great way to set yourself up for vacations abroad. But most people tend to avoid such investments because they believe them to be too costly. The good news is if you don’t already possess the required funds to outright buy a property located abroad, there are numerous financing options at your disposal.
While it might be true that seeking financing to buy a home abroad is less straightforward than seeking financing for a home in your locality, it is still doable as long you know what your best options are. Some of the more effective and convenient financing options we’ve come across include;
Using some of the equity from your current home.
While not all mortgage lenders are keen on financing a client’s goal of purchasing a property abroad, there are many others who will be more than happy to finance such a purchase. If you have an ongoing mortgage on your home, you can take out a second mortgage on it to finance your purchase. Depending on the value of your home and how much equity you have left, it is very possible to raise as much as you need via these means to get the property of your dreams abroad.
If your initial bank refuses to grant you another mortgage, you can also pursue the option of remortgaging your home. The option of remortgaging might even release more funds than you would have previously received from your original mortgagor. Also, you aren’t limited to mortgaging your home with a bank back home as there are international financial institutions that actually specialise in granting loans against real estate located in specific countries around the world.
But what if the option of a mortgage loan from the bank fails?
You can talk to a private lender.
There are various legal private money lenders available. While the terms of such loan agreements differ greatly from what you would find in a traditional bank, you can find a private lender whose loan agreement you find amicable by shopping around. There are even certain private lenders that specialise in loaning for overseas real estate purchases.
Another viable option is a bridging loan which is a type of short-term loan. Depending on your needs or circumstances, you can take up a bridging loan for a time period anywhere between a few weeks and two years. If you intend on selling your current home to buy an overseas one, you can take a bridging loan from a bank to cover the interval between buying the overseas home and selling your current one.
As the name implies, seller financing involves the property seller loaning you the buyer the needed sum for the purchase. While not very common in many countries, there are other countries where seller financing is considered a norm. Seller financing is especially common in csountries where a credit rating system is non-existent and mortgage agreements aren’t very popular.
By speaking to the seller of your property directly, you might find him/her amicable to a seller financing option which could involve you taking over an existing mortgage on the property with the original owner as co-signor. By settling the debt on the property, its full ownership will revert to you.
Most developers of new buildings in various countries offer this financing option to sellers regardless their country of origin. This financing option can be funded by the developer and you’ll probably get a better loan offer than what the local bank can offer. Developers engage in these sort of dealings so they can sell their properties faster and you can use this to your advantage to get your dream home abroad at a great price.