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Diary of a buyer: Finance flutters - 7 April 2008

Posted by Robert Southwell No comments

The past couple of weeks of looking in to the possibility of buying a property overseas have fitted nicely into the ‘boring but important’ file. Having spent a good few weeks having fun around the magazines, websites and property shows dreaming of the place we want to retire to, we have been brought back into stark reality by the credit crunch.

It’s a bit of shock to be honest, finding out that the property market, and the economy in general, can be so fragile and could conceivably suffer greatly this year. I have managed to be a homeowner now for over 40 years, and have weathered the storms of economic ups and downs. The property market seems to reflect the confidence of the country as a whole, and there is a good chance that there will be a drop in prices this year if past experience is any guide at all.

What this brings into perspective is that we will need to make sure we have considered all of the options when we come to decide how we are going to finance buying our home overseas. We have narrowed down the options for countries and regions to just fraction of the previous huge list, and from early enquiries it seems that we will be able to get a mortgage in whichever of these countries we finally settle on.

We are in the lucky position that we only have a small mortgage now on our UK home as a result of building an extension and a conservatory some years ago. This means that we have the option of extending the mortgage our home here in the UK, or taking out an overseas mortgage on the house abroad.

At first, I was pretty skeptical about the idea of having a mortgage based in another country, but it seems that there are plenty of people, agents and customers alike, who tell me that it is a perfectly safe and normal thing to do. But then, would it be better for us to have a new mortgage overseas, rather than in the UK where there are companies pulling out of the market almost every day and the economic outlook is pretty gloomy? Will anyone even want to lend us money in this country based upon a purchase overseas? I’ll be making some enquiries in the next week and let you know what happens…

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