5 Tips for Buying a House Overseas
06 February, 2019
Are you thinking of getting a property overseas or entirely moving to a new country? The process of getting a mortgage may be a bit different than what you’re used to at home.
No matter what the reason is for buying a house somewhere other than your home country, many people enjoy the ability to do so. Because of its popularity, there are many options available that allow homeowners to make their dreams of a destination property become a reality.
Don’t think you need to have millions of dollars to outright buy an overseas property. Although you may not get the conventional mortgage you’re used to; there are options available for you. Before we look at alternatives to help you buy a house overseas, take a look at United Fidelity funding and the different mortgage options available.
Financing an overseas home through the bank is possible. Although this can be a challenging option to find, it is one of your best and most reliable methods. The challenge is just finding where it’s available.
If you’re looking to finance buying a house overseas, there are a few things to take note of. The first is that the loan-to-value ratio tends to be lower than what you’re used to at home. Second, don’t expect to get long terms. The chances of you finding a 30-year loan are slim to none. Also, be prepared to have floating interest rates rather than fixed ones. Lastly, you may need life insurance to guarantee your loan.
Borrow Equity on Your Current Home
Unable to find a way to finance your new house overseas through a bank? You can borrow on your home equity line of credit to help you out. Typically, this is the most easiest and common way of doing it.
There are quite a few advantages of going this route. For starters, there is a good chance you’ll have lower interest rates than what you would find in a foreign country. In some cases, the rates overseas can be over four percent. Whereas, borrowing from your home equity line of credit could be as low as around two percent. You also only have to borrow what you need rather than using up the entire line of credit.
Find a Private Seller
If you find a private seller for your overseas home, they may be willing to finance the purchase price. You and the seller would then agree on the terms. Basically, instead of taking out a loan from the bank, you’re taking out a loan on the seller.
If you’re looking at a home through a developer, they may also offer financing options. Just like you would with other financing options, you would give them a down payment of an agreed upon amount, and they would finance you the rest of the purchasing price.
Dip Into Retirement Savings
Another option is to dip into your retirement savings if you have the funds available. However, there are strict rules you need to oblige to if you take this route. Also, once you use the money, that means you have less sitting in your retirement savings for when you need it upon retirement.