Buying a property in a foreign country is an exciting opportunity for many people. But the main bottleneck in foreign investment is securing financing. It is hard to find lenders willing to finance foreign nationals. Even if you get mortgage deals, the down payment is too high and interest rates are not favorable. Some banks also ask foreign nationals to take insurance naming the bank as the beneficiary. All these factors make financing property investment overseas a challenging task. But if you have your heart set on an overseas property, here are 3 ways to finance it.
“Cash is King” and this applies to real estate transactions as well. Sellers may offer huge discounts and upgrades if you offer to pay them in cash. However, paying upfront cash is advisable only when the property is ready to move in. If you pay in cash for an under construction property, there are chances that the project may be delayed or stopped due to some unforeseen conditions, which will result in you losing all the money. Paying in cash requires you to search for a good currency exchange in your home country. The exchange should offer good rate and should have operations in the country, you are buying property.
Some countries allow developer financing to foreign nationals, if they invest in a property during the development stage. To qualify for developer financing, you may have to buy property in lot. Developer financing is easier than mortgage because it involves very little paperwork and the interest rate is very less.
There are different types of arrangements under developer financing such as paying the total amount in equal instalments spread over a period of time, making a fixed percentage payment over a pre-agreed time period or make payments as per the construction stage of the project. You can choose the arrangement that suits your budget.
These are the two options to get the required funds to buy an overseas property. However, you have to search for a reputed currency exchange to transfer funds to the seller from your home country. The exchange should be reliable and should provide good rate of exchange for your dollars. Choose an exchange that provides the best rates and fast service.