What Matters When Buying Overseas Property?

For anyone trying to buy property overseas, you might just find that the challenge in getting the property signed up is more than you would have expected. For example, it’s very common for purchasing a home abroad to become a major expense for you to need to deal with, especially if you don’t take into account the sheer volume of risks that exist. Some of the most common pitfalls that you should look to research further or discuss include:

  • Financial protection from the Financial Conduct Authority does not apply with overseas sales, so you don’t have the same protection as you would by buying domestically.
  • Always take independent advice who is outside of the deal, the estate agency and the developer themselves.
  • Also, ensure there is someone involved who is fluent in both your language and the language of the other party, too.
  • Be sure to look at currency fluctuations if there is an exchange rate fluctuation of 20% or over, then you must be informed of this as it could make it harder to meet repayments later.
  • Read into the taxation laws of the nation you are buying a home in, and make sure that you can account for all of the tax in both the country you are buying in and the United Kingdom.

The above pitfalls all represent easily made mistakes when buying property in a foreign nation. Keep this in mind, and you can avoid some nasty surprises!


Why Was My Mortgage Application Declined?

When you get a rejection on your mortgage application it can be quite hard to deal with. It often feels like you are being victimized, but often the reasons for rejection are legitimate and, if acted upon quickly, easily solved.

The most common reasons include:

  • Poor credit history or excessive debt, or history of payday loans.
  • Not offering a high enough deposit to fit the cost of the home originally.
  • A deposit that might not be large enough to satisfy the needs of the company.
  • Repetitive applications for credit at one time.
  • Lack of earning potential to fit the mortgage requested.
  • Not being registered to vote in the United Kingdom.

These are some of the most common reasons why a mortgage application might be denied. Most of these can be overcome in the short-to-medium term, and should make it possible for you to get over the issue with your credit.

In the event of either being in too much debt or not having a large enough deposit, though, it may take a long-term solution to solve that problem. You should always look to work with specialists in finance to help you re-calibrate your financial profile and move towards a more optimistic image.

With the financial industries as they are at present, it’s easy to see why there is often a reticence to hand out mortgages. If you fall into any of the above categories, then you are more likely to face rejection.


Why Might I Need a Bridging Loan

When looking into various forms of loan that you can take, a bridging loan is very popular. They are used to help bridge a financial gap, most commonly used when buying a new home whilst waiting for your old home to be sold.

This will be secured to the buyers’ existing home, and the funds will be used as a down-payment on the next home. However, there are other reasons why a bridging loan might be benefit to you. some of the most common reasons for taking on a bridging loan might include:

  • To avoid repossession and to make sure that assets don’t have to be sold to pay a debt.
  • To make a quick offer on a property that’s up for an exceptionally high-value price.
  • To buy a property when at auction that you lack the funds to immediately afford.
  • Avoiding bankruptcy or forfeiting a deposit if the bank is having issues.
  • Handling and solving a short-term cash flow issue in your business.
  • Paying taxation bills or making a property development purchase immediately.

These are some of the most common reasons why you might find going for a bridging loan to be a good idea. Used in the right context and for the correct reasons, they often provide you with an effective financial solution for the short-term.

Like any other kind of loan, though, they should be used as a short-term solution, usually looking to make payments back in a few years.


A brief explanation of overseas mortgages

Overseas mortgages, or international mortgages as they’re also called, are used to help you finance property that you’re purchasing outside of the country you live in. You can arrange your own overseas mortgage through a UK bank or a financial lender who caters to international mortgages.

It can be more difficult to set up an overseas mortgage with a bank, because you’d need to find a banking company that has a branch in the country you’re buying your property in and the country you live in. Whereas, if you borrow from a financial provider, you can keep dealing with the same company and people for your overseas mortgage.

Deposits needed for overseas mortgages are usually higher than standard UK mortgage, so you’ll need to take that into account when you’re considering buying property aboard that you need a mortgage for. Also, as you’ll be making repayments from a different country, using a different currency, your financial provider lawfully needs to tell you if the exchange rate changes by 20% or more.

You should also consider he extra legal and tax charges that you’ll need to pay when purchasing an overseas property. These costs typically add an average of between 10 and 15 percent to the final bill.

It would be smart to get advice from professionals when thinking about buying a property abroad and taking out an overseas mortgage. Financial lenders and solicitors will be able to point you in the right direction, to ensure that no unexpected fees come your way.


Tips for first-time buyers

The idea of owning your own home can be exciting, if daunting. We’ve put together a few tips for your in this short article to put your mind at ease and get you on the right track:

1. Save as much as you can

Before you buy, save up as much money as you can. You’ll need your savings and a solid income to secure a good mortgage deal with a financial provider. The bigger a deposit you can make, the lower your interest rate might be.

2. Shop around for your mortgage.

Mortgages are everywhere, and you might not want to go to your bank for the loan. Compare several promising mortgage providers, and total up how much each mortgage is going to cost in the long run.

3. Check your credit

Your credit score and your credit history can affect a lot of essential borrowing needs, including finding a mortgage. You can easily check your credit score online with just your bank card, and doing this will give you a good idea of whether or not you’ll be accepted for a mortgage.

4. Read the small print

Check the criteria and policies of all and any loans you’re considering applying for. Get the offer advertised, without any hidden costs attached.

5. Register to vote

This seems out of place, we know, but financial lenders will check whether you’re on the electoral roll and may not lend to you if you’re not. Register as soon as possible before you apply for finances.


Understanding buy to let mortgages

A buy to let mortgage is a mortgage secured against a property that has been purchased with the idea of letting it out to tenants in mind. The property owner becomes the landlord to rent out the property for profit.

Unless you’re a cash buyer, you’ll need a buy to let mortgage to rent out a property. The mortgage is based on the fact that you’re not the permanent resident, which means it’s assessed in a different way to standard mortgages. Standard mortgages for residential properties are assessed on the income of the borrower, whereas, buy to let mortgages are assessed by the potential rent income from the property in question.

Interest rates for buy to let mortgages are typically higher than those of standard mortgages, and the deposit you would need to secure the mortgage will be higher, too. You’ll usually need to be able to cover at least 20% of the property value yourself.

Even if you’re thinking of renting out your current home to tenants, you’ll still need a buy to let mortgage to do so. This may mean remortgaging your home if you’re switching financial lenders. However, if you do stay with your current lender, you must inform them that you want to rent out your property, or you could be in breach of your contract with them.

Take into consideration other expenses and possible hidden costs before you try renting out your property. Seek advice from solicitors and financial lenders who offer buy to let mortgages.


5 Tips for buy to let

Buy to let properties are properties that are purchased to be rented out by their investor for the sole intention of creating an income. Before you get started with your new business endeavour, there are a few things to consider:

1. Can you afford it?

Renting out a property means taking out a buy to let mortgage. A mortgage means interest rates and repayment fees, at least. You should also factor in solicitors’ costs, maintenance costs for the property, and the possibility of an irregular income from the property.

2. Do you have spare time?

Being a landlord means looking after the wellbeing of your tenants in regard to the upkeep of the property. If your tenant calls you with a maintenance issue, no matter what time of day, it’s your duty to respond to that call.

3. Get the best mortgage

Your current financial provider might not be the best one to provide your buy to let mortgage. In this case, try comparing other mortgages from lending sites and seeing how they match up to each other.

4. Look into insurances

You’ll need specialist insurance for your property, particularly building and contents insurance. The insurance has to be for a buy to let property, not a residential one, otherwise losses won’t be covered.

5. Legalising

Ensure that you get a valid tenancy agreement signed before your tenant moves in, and have a professional draw the contract up to ensure that your tenant doesn’t get rights to the property that you didn’t mean for them to have.


What does adverse credit history mean?

may hear or see the term “adverse credit” or “adverse credit history”. What this refers to is someone who may have a poor credit history.

A credit history is formed from your history of credit products, such as loans, mortgages, credit cards, and even your bank current accounts. Even mobile phone contracts can affect your credit history. Each month, lenders report to credit reference agencies whether or not you have made the full payments you needed to make. This is where your credit history is found.

Adverse credit comes from missing repayments or late repayments on loans, credit cards, and mortgages. You’ll also get marks against your credit history for late or missing payments on any credit agreements you have. For example, mobile contract payments and monthly insurance agreements.

When you apply for credit (a loan, a mortgage etc.), the financial lender you have applied to will easily be able to check your past credit history. Credit histories are seen as a row of green ticks and red crosses. Too many red crosses and your financial loan request isn’t likely to be approved.

The main thing to consider when applying for a loan or mortgage is the financial provider’s loan criteria. Some lenders will still accept you with a bad credit history, or an “adverse credit history”, but they usually require significant collateral, and proof that you will be able to afford the repayments requested.


Remortgaging your home

To remortgage, you replace your current home loan with a new mortgage. You don’t usually have to use a different financial lender to remortgage, though if you find a better or cheaper provider, then the decision is ultimately up to you.

Before you apply for a new mortgage, you should consider working out the total cost of the new loan you’re looking at; including any interest that would be added over the months that you’re repaying the loan. The total cost will vary from mortgage to mortgage depending on several factors: interest rates, fixed period loans, discounted mortgages, and tracker rate mortgages. It might be helpful to use a mortgage repayment calculator to figure out the full repayment price.

Now, do the same for your current mortgage plan. This will give you an idea of the difference between your mortgage with your current financial provider (who is more than likely going to give you the same deal if you remortgage), and a different financial provider (who could possibly offer you a better rate).

Here’s where it gets a little tricky. When you switch providers, you use money from your new mortgage to repay the rest of your existing one. Bear in mind that repaying a mortgage early incurs charges and remember to take these charges into account. Plan ahead when you’re considering remortgaging, because the process takes time. Not as much time as buying a new home, but still a significant amount, especially if you’re switching lenders for the new mortgage.


Paying off your mortgage early

Mortgage repayments are made every month to your financial provider, usually with interested added over the period of time that it takes you to repay in full. You do have the option to repay your mortgage earlier than the allotted time, but there’s some debate as to whether or not it’s a good idea.

The main reason that people repay their mortgages early is because it leaves them with a better financial future than if they keep making those monthly repayments. Being mortgage-free means that you can have more control over your income, and what you decide to do with the money that you have left over. You could also cut down your hours at work to spend more time at home. Paying off your mortgage also makes it easier to buy/sell your home.

If you do want to pay off your mortgage early, there are a few things you might want to consider beforehand. There can be significant financial penalties for paying off a mortgage early, meaning you could end up paying more than you were originally going to. This usually happens on fixed rate and discounted mortgages. You should also consider whether you can afford to pay off the whole sum without it putting a too-large hole in your pocket. There’s no point paying off your mortgage in full if you can’t afford to.

If you can’t afford to entirely pay off your mortgage at the moment, but you’ve found a better mortgage deal, you might want to think about remortgaging.

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