International Mortgage

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International Mortgage

International Mortgage

All about international mortgages with Scott West.

Why would you invest overseas as a UK national?

Predominantly we get enquiries for people wanting to buy holiday homes that they can go and stay in for four or five weeks of the year – and mainly let them out as a kind of Airbnb or holiday let. 

Another reason is to invest in long-term Buy to Lets in a foreign country. You might know an area that looks to be a good investment. There are various reasons why people want to buy a home abroad. 

Can a UK resident invest overseas?

Yes, they can. It’s a very similar process to how we would work in the UK. Some of the lenders’ criteria do change and we need to be aware of legal processes in the relevant country. 

Buying in France, for example, is not too bad, while buying in Spain can be a challenge – there are lots of complications with structuring and tax laws. So understanding where you’re buying and having done some research is important.

Can a UK company buy property overseas?

Yes, it can. I’ll caveat that by saying it does depend on how you’re structuring the entire loan facility and how you’re working the deposit and the income from that investment. 

It’s usually simpler to set up a company in the relevant country to own and manage the asset. Then you can declare income back to a UK company. It just needs a bit of structuring and fine tuning.

How do I apply or qualify for an overseas mortgage?

It’s similar to the UK process. You’ll need a deposit and affordability. Depending on what asset we’re buying, the deposit will change. You’re more likely to need a slightly bigger deposit purely because of the risk involved for the lender: as you’re not a national or residing in that country. 

Deposits can go up to 40% or 50% depending on the level of lending required. If you’re looking at a relatively small asset, €300,000 or €400,000 for example, you will probably get a 60% Loan to Value. 

If we’re looking at a very large asset, a villa or a chateau costing into the millions, you might be restricted to 50% Loan to Value for those.

What is the international mortgage application process?

First, find a broker – hopefully us. We’ll discuss with you your rationale for the investment and your budget. We’ll be able to present you to various lenders that have a presence in the relevant country and packaged the deal accordingly. 

It does require an understanding of the country’s laws, which lenders have a presence and whether they have an appetite to lend there, as well.

You can’t just Google buy Buy to Let in France and expect it to pop up with a list of lenders. It does require a few relationships and contacts. It’s not quite as simple as you would think.

Understanding who to speak to and how to package that deal is a really crucial part of the transaction.

The Financial Conduct Authority does not regulate most Buy to Let Mortgages. 

What else do we need to consider on international mortgages?

It just comes down to understanding the client’s target market. We have a lot of people who want to buy a holiday home in a particular area because that’s where they want to go on holiday – not for a specific investment purpose. Those can be done too, assuming you can demonstrate affordability and income. 

A broker really will help package the deal, understand the lender’s criteria and ensure you have a relatively painless process.

Your home may be repossessed if you do not keep up with your mortgage repayments.