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OVERSEAS
MORTGAGES
The British are exporting their love affair with property. Increasing numbers are buying homes abroad, attracted by low prices, high temperatures and the hope of hot profits in the years ahead.
Birmingham Midshires, part of HBoS bank, says that one person in ten plans to retire abroad, while Alliance & Leicester bank predicts that 2.3 million more Brits will own property overseas in the next ten years.
But experts warn that buyers' heads should rule their hearts when looking for a sunny retreat overseas.
'It is astonishing how many people enter into transactions abroad with an abandon they would never dream of back in the UK,' says Jeremy Davies, author of the Consumers' Association guide to buying property abroad.
'There is a host of legal and planning problems for buyers overseas that you don't face in the UK, and if you are not prepared, you can make expensive mistakes.'
Those most likely to hit problems are homeowners who remortgage* their UK properties to raise the money.
Simon Conn of overseas mortgage broker Conti Financial Services in Hove, East Sussex, warns: 'Being a cash buyer can seem appealing, but when money is burning a hole in your pocket, you can miss some of the checks that would be automatic if you had to worry about issues like mortgage finance.
'If you want to buy abroad successfully, you must take things slowly and get plenty of professional help.'
Taking a special mortgage for an overseas property can introduce some of these checks and balances. And an increasing number of mainstream UK lenders now have overseas operations.
Barclays, Halifax, Leeds & Holbeck and Norwich & Peterborough building societies all have operations in Spain, while Abbey is one of the biggest UK lenders in France. Brokers such as Conti can find loans for other countries.
Overseas mortgages come in two basic forms: sterling loans where interest rates are based on UK levels and repayments are in pounds and pence, and foreign currency loans where rates are set in the country concerned and repayments must be made in its currency.
The local arrangement can look good value, especially in Europe where interest on euro loans in France, Spain and Portugal starts at about 2.75%.
David Wells, manager of Abbey National France, says: 'As all the outgoings on your overseas home are likely to be in euros, it is simpler to have your mortgage in this currency as well.'
But euro mortgage borrowers must be prepared for changes in the exchange rate. If it goes against them, a repayment of, say e500, which is now worth about £350, can become more expensive in sterling terms, even if interest rates stay the same.
If your income is in sterling, you will also have to pay to convert your money into euros for each mortgage payment. The value of your mortgage will also vary with the ex-change rate.
Whatever type of mortgage you pick, former financial controller James Cook, 35, says using a British lender to arrange an overseas mortgage means you feel more in control of the process.
He and his wife Ruth moved to the South of France two years ago after deciding to get out of London. They live in Cannes with their three children, Christy, 13, Elise, 11, and newborn Gabrielle.
James says: 'We spent a lot of time looking for the right property and a lot of time finding the safest and most efficient way to pay for it.' In the end, they turned to Abbey National France for a euro mortgage.
'Dealing with a UK name gives you more confidence because you know that they have already helped other British people over all the hurdles you are likely to face,' says James, who now works for himself installing satellite television systems.
'The paperwork in France can seem overwhelming, so it helps to have English-speaking advisers at your bank who can talk you through it and help solve problems,' he says.
If you require finance to
purchase an Overseas Residential property, then CCC Financial, have many years
experience in arranging this type of mortgage facility. Commercial loans also
considered on a case-by-case basis. CCC Financial are UK based Licenced Credit
Brokers and are registered for any applicable UK Mortgages by the Mortgage
Compliance Board.
© CCC Financial
sub prime lender offering secured and unsecured loans
UK.
