We get a lot of people enquiring about international mortgages. As you’ve probably guessed, purchasing a property abroad can (in many cases) be more complex than buying one in the UK - and this is where an international broker comes in.
In this piece, you’ll learn what to bear in mind when considering a foreign property purchase, or when comparing international mortgage brokers in the UK.
As may be obvious, an overseas mortgage broker is one who specialises in helping you to buy property abroad - whether through a mortgage or shorter term finance.
Put simply, every country does things differently - and if you come unprepared you could be in for an unpleasant, expensive ordeal. A great international mortgage broker can help you to avoid this kind of experience, and are worth their weight in gold.
What the main advantages of using a UK based overseas mortgage broker?
There are a number of reasons why you should use an expert broker if you’re buying property abroad, and they include...
The right financing
Like with domestic property, an overseas mortgage broker can help you to find the mortgage with the best rate and terms for your unique needs.
The difference is that, all things considered, finding the right financing can be a lot harder in the international market. If you thought the ‘DIY’ route was arduous in the UK, international property could take it to a whole new level.
This is especially true if some (or all) of your income is non-standard, the country you’re buying in is less popular amongst UK buyers, or the property itself is of an unusual construction. It could also be true if you’re an expat buying abroad - as you might not be able to access the kind of financing available to a permanent resident.
Independent advice and an independent perspective
An independent mortgage advisor who understands the country you’re buying in can help to provide local expertise and a third party perspective which could help you spot (and avoid) any potentially expensive pitfalls.
UK regulatory protection
Dealing with a UK based international broker ensures that you’re protected by various regulatory bodies - such as the FCA and the Financial Ombudsman Service.
Avoid potential marks on your credit file
Doing the legwork yourself and approaching multiple lenders in search of the best deal can be exhaustive, but it can also leave you with marks on your credit file, which could make future mortgage applications more difficult.
Some lenders are wary of customers who have too many hard searches on their record, but if you apply through one of the expert overseas brokers we work with, you can rest assured that you will be introduced to the right lender the first time.
Where can I find advice for buying property overseas?
We have access to a network of overseas mortgage brokers, advisors and international mortgage specialists who can provide you with bespoke advice on this niche lending category.
They can help you find international lenders, UK lenders who lend abroad, and foreign mortgage providers who’d be willing to consider overseas applications.
In the meantime, here are a few things to bear in mind if you’re considering a foreign property purchase.
Consider what you’ll be using the house for
Like with UK mortgages, what you intend to do with the property will help to determine the kind of mortgage you can get, and the kind of administrative hurdles you’ll have to surmount.
For example, whilst buying a foreign property as a second home may be more straightforward from a financing point of view, you won’t always be there to look after it. This may result in having to plan (and budget) for additional security and maintenance.
If you’re buying to let, you’ll probably need to find a specialised buy to let mortgage, and think seriously about the kind of rental yields you might realistically be able to achieve with the property.
It could involve more admin and work
As we’ve said more than a few times now, buying property overseas is often more complex than buying in the UK.
There are local laws, licenses, taxes, customs, maintenance fees and consents that all need to be taken into account. On top of this, there can also be UK taxes and paperwork.
Another thing to remember is that the administration of a property can be more complex if you’re not there in person to do it (for example, if you’re looking to buy a holiday home, or rent the property out).
There could be age restrictions on buying
Some countries set an upper limit on how old you have to be to get a mortgage, usually 70 to 75.
Keep an eye out for scams
You’ve no doubt heard horror stories about UK buyers being duped out of thousands of pounds for schemes such as ‘oversees developments’ that never materialise.
Though people are understandably more wary these days, the scammers are still out there, and more importantly, the scams continue to evolve.
As an example, buying in a ‘hot’ off plan development could save you money, or it could be nightmare. As with most things - if it seems too good to be true - it probably is.
Using an expert broker can help you avoid pitfalls like this.
You may need a local bank account
Many countries won’t allow you to pay taxes and bills without opening a local bank account, which might not be as simple as it should be.
You’ll need to account for currency fluctuations
Fluctuations in the exchange rate can result in a lot of uncertainty as to how much everything might actually cost, at the end of the day. Even the smallest change in the exchange rate could push your monthly costs up (…or down, if you’re lucky) by a sizeable margin.
Because of this, some borrowers opt for multi-currency mortgages, or will buy the funds in advance from a currency broker. This allows the money to be ‘locked’ at a certain price for a small premium.
For more information on international mortgages, take a look at our guide here.
What are ‘international mortgage services’?
The term ‘international mortgage service’ typically refers to a full-service company that specialises in helping home-buyers to purchase property on the international market.
By ‘full service’, we mean that in addition to brokerage, they offer a range of services such as legal, conveyancing, accounting and foreign exchange.
Many such services are offered by banks (both high street and private), and though they’re often pitched at the high net worth buyer, they are not the exclusive domain of the ultra-wealthy.
What do these firms do?
Some of these firms specialise in certain areas, maintaining extensive local ties to the countries and regions in which they operate. So, if you do decide to use one, you may need to find a company with experience in the country that you’re interested in.
The main benefit of using such a service is the convenience and reassurance that a ‘pre-assembled’ network of professionals can provide. As we’ve said before, finding people who have the skills for the region you want to buy in can be difficult.
The downside is that this can be expensive. Another thing - all of the parties working as part of the same company means that impartiality (or the lack of it) is now a factor. To be sure, get professional advice from the whole-of-market brokers we work with.
You might want to consider the services of a good local solicitor and accountant. They should be independent of everyone else involved in the purchase.
Is there such a thing as an ‘overseas mortgage finder’?
Not really. It’s hard enough to accurately calculate all the variables with a UK mortgage, let alone the variations that are inevitable with every different country!
Your best bet would be to get in touch with one of the international mortgage specialists that we work with. They can take a look at your unique circumstances and needs, and give you a far clearer picture about what’s possible.
Want some help with your international property purchase?
If you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0800 304 7880 or make an enquiry here.
Then sit back and let us do all the hard work in finding the overseas mortgage broker with the right expertise for your circumstances. – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.
*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA.Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes.
The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete's presence in the industry as the 'go-to' for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!
Read more about Pete here...
Find out more about how we help people get mortgages Overseas