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Buying a Home Abroad

Posted on: 15th Jan 2015

Before deciding where, when, or indeed whether to buy a home abroad, it's important to do your homework thoroughly and investigate all the possibilities. It may be that you already know the country where you wish to buy a home and have a good idea exactly what you want - but have you thought about the alternatives?

            It isn't uncommon for buyers to regret their decision after some time and wish they had purchased a different type of property in a different region - or even in a different country!

            The first question to ask yourself is exactly why you want to buy a home abroad? For example, are you seeking a holiday or a retirement home? Do you want a summer or winter holiday home or both? Are you primarily looking for a sound investment or do you plan to work or start a business abroad? Perhaps you have...

Which Country?

Posted on: 15th Jan 2015

Having decided exactly why you want to buy a home abroad, the next thing you need to do is choose the country. If you're looking for a holiday or retirement home or 'simply' wish to made a long?term investment, you will be faced with a wealth of choices. There is, of course, no perfect country for everybody, although most people manage to find their particular dream home in their ideal country. Many retirees, particularly North Americans and northern Europeans, spend the winter abroad and return to their home countries in the spring or summer. This allows them to take advantage of the milder winter weather abroad, e.g. in Spain, Florida, South Africa, South America or even Down Under, and spend summer with their families in their home countries.

            When choosing a country there are numerous considerations to take into account. For example, do you want to enjoy year?round sunshine or...

Research

Posted on: 15th Jan 2015

Having decided the country where you plan to buy a home, your next decision will be to choose the area and the type of home to buy. The secret of successfully buying a home abroad is research, research and more research. You may be fortunate and buy the first property you see without doing any homework and live happily ever after. However, a successful purchase is much more likely if you thoroughly investigate a country, its regions, the type of properties available, prices and relative values, and the procedure for buying property.

            It's a wise or lucky person who gets his choice absolutely right first time, but you will have a much better chance if you do your homework thoroughly.

            As when making all major financial decisions, it isn't advisable to be in too much of a hurry. Many people make expensive (even catastrophic) errors when buying a home abroad,...

Finance

Posted on: 15th Jan 2015

Can you really afford to buy a home abroad? What of the future? Is your income secure and protected against inflation? In the '80s many people purchased homes abroad by taking out second mortgages on their family homes and stretching their financial resources to the limits. Not surprisingly, when the recession struck in the early '90s many of them lost their homes abroad when they were unable to keep up the mortgage payments. As if that wasn't warning enough, this scenario was repeated in 2008-09 - only much worse - when the worldwide property market collapsed in the wake of the credit crunch and resulting deep recession.

            Buying a home abroad can be an excellent long?term investment, although it's possible to get your fingers burnt in the volatile property market in some countries. In many countries local people don't buy domestic property as an investment, but as a home for...

Mortgages

Posted on: 15th Jan 2015

Mortgages or home loans for those buying a home abroad may be available in your home country, the country where the property is situated, and possibly also from financial institutions in offshore banking centres. The amount that can be borrowed varies depending on the country where the property is situated, the country where the loan is to be raised, the lender, and, not least, your financial standing. In recent years (2008-09), lenders have tightened their lending criteria in most countries due to the repayment problems experienced by recession?hit borrowers, and some lenders apply strict rules regarding income, employment, the type of property on which they will lend and the amount (LTV) they will lend. Foreign lenders, such as banks in offshore financial centres, also have strict rules regarding the nationality and domicile of borrowers, and the percentage they will lend. In theory, lenders based in European Union (EU) countries are allowed...

Legal advice

Posted on: 15th Jan 2015

It cannot be emphasised too strongly that anyone planning to buy (or sell) property abroad must take expert, independent legal advice. Never sign anything or pay any money until you have sought legal advice in a language in which you're fluent from an experienced lawyer (preferably someone who has been recommended). If you aren't prepared to do this, you shouldn't even think about buying a home abroad! The majority of people buying a home abroad don't obtain independent legal advice and most people who experience problems take no precautions whatsoever when purchasing property. Of those that do take legal advice, many do so only after having already paid a deposit and signed a contract or, more commonly, after they have run into problems.

            You will find the relatively small cost (in comparison to the cost of a property) of obtaining legal advice to be excellent value...

Getting there

Posted on: 15th Jan 2015

Although it isn't so important if you're buying a permanent home abroad and planning to stay put, one of the major considerations when buying a holiday home is communications (road, rail and air links) with your home country. How long will it take to get there, e.g. by air, taking into account journeys to and from airports? Is it possible to drive? One of the main advantages of being able to drive to a holiday home abroad is that you can take much more luggage with you (including provisions unavailable locally) and the cost for a family may be significantly lower than using public transport.

            Could you travel by bus, rail or ship/ferry? What does it cost? How frequent are buses, flights  trains or ferries at the time(s) of year when you plan to travel. Is it feasible to visit a holiday home abroad for a long weekend, given the...