It is a common assumption that arranging mortgages on overseas property is a difficult and lengthy process. In fact, this need not be the case at all if you ensure you work with the right partners.
The property purchase procedure differs from country to country but by working with experts in the area who understand the culture and local practices any differences can be explained.
As with all property purchases, whether abroad or in the UK, intermediaries must ensure they offer clients the best advice and guidance possible.
Buying a home abroad is a big decision for the client and it is important that they take the time to get it right. Similarly, intermediaries must ensure they work with the best partners who can support their needs throughout the process.
Euro mortgages
The Euribor is at a historically lower rate than the UK and has resulted in an increasing number of people opting for euro mortgages; something that would not have been so common just a few years ago.
An important point to remember when clients are considering taking out a loan in euros is that the lender will require monthly repayments in that currency.
Fluctuations in the exchange rate will certainly affect the value of the monthly repayments, if they are being met from income earned outside of the euro zone.
Use the experts
Both broker and client must be confident that they are working with specialists who understand their needs. Working with providers who are familiar with the practices in the country of intended purchase may seem obvious but is an invaluable asset to any intermediary.
This should ensure that the process runs as smoothly as possible with utmost ease for the client and should any difficulties arise, the provider should be able to deal with them quickly and professionally.
In Spain, British expatriates are an important part of the property market, particularly within the popular Costa del Sol and Costa Blanca regions. This has resulted in the emergence of a few well-known UK banks in Spain.
These banks specialise in providing a range of financial services for residents living permanently in Spain and also for those buying a holiday home. One particular advantage of this is that they are used to dealing with British customers and understand their needs as most Brits buying property in Spain demand similar products and services to those available in the UK.
Culture and communications
The main difficulty most prospective buyers experience in the house buying process overseas is overcoming language barriers. Often the use of different jargon, such as evaluators rather than surveyors, can compound the issue.
Some countries also require additional measures. For example, in France, it is necessary to sign a Compris de Vente which is an initial legal contract signed just after the initial offer is accepted.
Similarly, in Spain, you must have a Número de Identificación de Extranjero (NIE) identification number before you can proceed with a property purchase.
However, as long as care is taken over the choice of provider and some initial enquiries are carried out to check its ability to deal with British customers in English, all these differences can be overcome.
For this reason, the British banks that combine a network of branches in Spain with a customer service team in the UK are best placed to provide the product range and standards of service expected by British customers.
Supportive providers
It is not always possible for mortgage intermediaries to know all the intricacies of every market. Many mortgage providers for overseas properties will work closely with intermediaries to ensure they have the relevant knowledge, skills and expertise to operate efficiently within the chosen market.
For example, UK Intermediaries lacking experience of the Spanish market can deal directly with our UK operations team, who can provide advice about applications submitted, mortgage packers and Banco Halifax Hispania's lending criteria.
The senior underwriters within the UK based operations team are more than happy to work with the intermediary to ensure that applications are processed smoothly.
For mortgage intermediaries then, the key lies in working with partners who are experts in the field. Choosing a provider who offers a strong brand, extensive product range, professional advice, excellent customer service and a proven track record can be difficult but is not impossible.
Arranging mortgages on properties abroad is not as complicated as is often widely assumed and by working with the right provider, a first class service can be provided by all.
