Overseas Mortgages  Alternatives

Overseas Mortgages

When purchasing a property abroad, the issue of financing becomes slightly more complicated, for further information click here...

Get a Free Quote Equity Release - an Alternative to Overseas Mortgages

If the idea of securing finance in a foreign country seems a little too much to take on, there are alternative ways to finance that overseas property. Apart from obtaining a local mortgage, other routes are available for financing a potential overseas investment without having to deal with the issue of understanding foreign financial documents.

Buying for Cash
A very popular alternative to obtaining a foreign mortgage is to release the equity in a UK property (either in another investment property or in the family home). This works by re-mortgaging the chosen property in order to allow the investor to purchase an overseas property for cash.

Advantages of Equity Release
One of the main reasons that an investor might select the equity release option is to avoid having to deal with foreign and unknown bureaucracy. Also, by using the equity release option it is possible to take advantage of remortgaging deals which are commonly available in the UK. It may be easier to prove status to your current bank which will, in turn, allow you to borrow more cash, more readily, than if you have to prove your status to another foreign lender. It is also much easier to budget through re-mortgage, as there are no currency fluctuations or unpredictable charges.

Disadvantages of Equity Release
Equity release really does not suit everyone. In particular, caution should be exercised when considering equity release on the family home. By re-mortgaging to release cash, the mortgage payments on the family home will increase. If the mortgage payments cannot be met due to the increase in cost (or any other reason) then the home to which the mortgage relates will be in danger of re-possession. Therefore, the failure of an overseas investment could actually result in the loss of the family home.

Another potential disadvantage is that with a buy to let mortgage there are often limits to the amount of mortgage in relation to a percentage of the full value of the property. This is normally set at a maximum of 90 percent. Consequently, releasing equity may not actually produce sufficient cash to purchase the overseas property of your choice.

Summary
Bullet Point Equity release on a UK property is a possible way to finance an overseas property;
Bullet Point by using equity release, it is possible to keep financing in one place and to use the familiar UK mortgage system; but
Bullet Point equity release from a UK property may mean that the UK property is in danger of repossession, purely due to the failure of an overseas investment.

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