Buying a holiday home overseas can be an exciting prospect, but arranging finance in another country can be more complicated than securing a mortgage in the UK. I recently assisted a UK national who was looking to purchase a property overlooking Lake Geneva and needed an international mortgage.
The property was valued at approximately €795,000. The client had already approached a retail bank directly and received terms for a 75% loan to value (LTV) mortgage on an interest-only basis. However, before proceeding, he wanted to establish whether a specialist broker could identify a more suitable structure.
The client had a strong financial profile, so I reviewed the wider international lending market to establish which lenders were likely to be able to accommodate the proposed purchase.
OUR SOLUTION
After approaching suitable international lenders, I identified a private bank that was prepared to offer significantly greater leverage against the property. The lender agreed to provide finance covering the full purchase price, with part of the arrangement involving assets under management (AUM).
The facility was structured on an interest-only mortgage basis and included no early repayment charges, providing the client with additional flexibility over the term.
This represented a significant improvement on the terms the client had initially sourced independently and allowed him to proceed with the purchase without providing the substantial cash deposit originally anticipated.
The case highlights the value of specialist international mortgage expertise when purchasing property overseas. Different lenders can take very different approaches to LTV, repayment structures, AUM and international borrowers, making specialist lender access particularly valuable.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, affordability, property suitability and lender criteria. Terms, rates, LTVs and availability may vary depending on individual circumstances.
Risk Warning:
Your property may be repossessed if you do not keep up repayments on your mortgage or other borrowing secured against it. Property values can fall as well as rise. Where borrowing or assets are held in a foreign currency, exchange-rate movements may also affect the sterling value of the borrowing or associated payments.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
