So you want to buy a house that you can live in, but you need to finance it?
You can ask for a mortgage to finance it from any local bank; however, what if you are interested in buying a vacation home that you can spend your holidays in, but you are confused about whether you can obtain a mortgage to finance that holiday home?
It’s not as challenging as you may think, and you don’t have to worry, it’s all in this guide. Here’s how you can get a mortgage for a holiday property.
Can You Get a Mortgage
There are special mortgage providers for people interested in buying holiday properties, whether abroad or in their home country.
There are expert brokers who can arrange the deal for you. Brokers can get you the deal that is best suited for your circumstances and needs.
They are experienced in property markets in the area you are buying the property in, and they can provide you with a deal that matches your requirements.
What Can It Be For?
Holiday properties don’t have to be exclusively for your own leisure use; they can also be a great opportunity for investment.
For instance, you can rent this property for tourists who are on holiday. Realtors at ArazoEstates.com recommend renting holiday properties for tourists when you are not using it yourself, as a means to generate extra income.
This could be a very good investment especially if the area is a popular tourist destination. Another benefit of renting your holiday house to tourists is that the house would not be vacant for a long period of time, which can protect it from burglary.
Things to Consider
Whether you buy property in your home country or abroad, you need professional assistance, and that assistance comes in the form of a solicitor. Legal representation is crucial when you are buying a holiday home abroad.
However, make sure to seek a solicitor who is independent of the deal, and is not related to any party in it, whether it’s the developer, the seller, or the estate agent. It’s also worth mentioning that it’s preferable if the solicitor knows the language of the country you are purchasing the property in, so they can understand the contracts of the deal, and be able to converse with the other party.
Moreover, you will need to check your own tax liability in your home country, and you will need to check if there is property tax in the country you are purchasing the property in because there may be an upfront tax when you make your purchase.
However, there could be an ongoing tax that you’re unaware of, which is why it’s imperative that you ask your legal representative so that you don’t get into legal trouble later on.
Getting Mortgage Abroad
You can obtain a mortgage in just about any country.
Local lenders in overseas countries usually offer lower interest rates than your home country and more mortgage options. That said, depending on the local currency compared to the currency of your home country, it could prove a very sound decision if you decide to take a loan in a foreign currency.
However, there are disadvantages when using a bank overseas to finance your property. First, your mortgage could be influenced by the fluctuation in currency, and the rate could change accordingly. Second, you might not receive the same legal representation you would have received had you bought the property in your home country.
Further, deposits are another viable option when buying properties. Deposits are great because they help reduce the number of monthly repayments of the mortgage.
Additionally, if the percentage of the deposit is high, you have to make sure that you get the best exchange rate so that you can avoid paying any additional costs.
Some companies specialize in international money transfers, and they can save you the hefty transfer fees.