The Mortgage Process

 


Savills  

When buying a property, particularly in a foreign country, most of us need to call on the expertise of a professional. Sublime Location have teamed up with Savills because they are also the best at what they do. 

Savills has a team of professionals experienced in foreign property purchase and international mortgage advice. Their international division includes fluent French, Spanish and Italian speakers which enable them to speed up the application process when dealing with local notaries and foreign banks.

Savills can also arrange finance throughout the UK and across Europe - in France, Spain, Portugal, Italy, Switzerland and Spain - and in the Caribbean and the US. They are fully independent, which means they can access all lenders - giving the client more choice and competitive rates.

Remember it's never to early to start sorting out your finances...



If you are thinking about getting a mortgage to help you finance and purchase an international property then the following information may help:

Decide on your budget: This is an important first step. There is no point in viewing property you can't afford.

Get a mortgage agreed in principle: Mortgage lenders will tell you whether you qualify for a mortgage and how much you can borrow even before you make a formal application. SPF provides this service at no cost. An agreement in principle lasts three to six months, which enables you to view overseas properties confident that a lender has pre-approved the finance.

Find a property: Arrange to view properties, possibly sign a reservation contract and pay a holding deposit. You must seek independent legal advice before putting down a deposit or signing anything.

Make a full mortgage application: Once you have made an offer on a property, the next step is to complete the full mortgage application form. If you have followed the above steps, this should be straightforward. SPF will assist you every step of the way.

Valuation: The lender will require a surveyor to value the property. This takes place once a mortgage application has been submitted, although in certain circumstances SPF can enact this valuation at the first stage of the process.

Completion: A date will be set for you to complete and for the property to be transferred to you.

Get pre-qualified


You can pre-qualify your application before you start your property search to give you an idea of what you can afford. Whether you are employed, self-employed or retired, we will endeavor to raise the finance you need in the country of purchase or via the UK through tailored solutions specifically designed to meet your needs.


Raising UK finance

If you are resident in the UK, raising capital against your home is a cheap and straightforward way of getting hold of some cash. Funds can be raised either by taking a further advance from your lender or by remortgaging your existing home loan and increasing its size. But you must have sufficient equity in your home and, even if you do, you may be uncomfortable with the idea of using your family residence as security on a holiday home.

Lending criteria


How much you can borrow to purchase a property in the UK depends on your income and the size of your deposit. Unusual requirements are very much the norm, rather than the exception for our clients and we will always endeavour to achieve a suitable solution to whatever circumstances you may present us with.

Releasing equity


Equity is the proportion of your property that you own, i.e. the part that has no mortgage on it. For example, if you own a property worth £200,000 and have an outstanding mortgage of £90,000, you have £110,000 of equity.

This can be used to purchase a second home or investment property. You can raise up to 90% of the value of your home as a new mortgage to purchase a second home. Using the above example, you could release £90,000, resulting in a new mortgage of £180,000. The first £90,000 covers your original mortgage; the balance can be used to buy that dream villa in Spain, cottage in France or townhouse in Italy.

Borrowing in foreign currency against your UK property


You can borrow against your UK property in a foreign currency, such as Euro, Dollars or even Yen. This is aimed predominantly at portfolio investors but it is possible to borrow in foreign currency. Seek specialist advice before choosing this option: our international advisers can assist you.

This may make sense for someone with a property portfolio in excess of £1m when you consider that you pay around 6% for a UK buy-to-let tracker mortgage, compared to 2.75% if you borrow in Euro. Borrowing in a foreign currency on a UK asset has inherent currency risks. Seek specialist advice before choosing this option: our international advisers can assist you.

Insurance

Buildings insurance is compulsory. While you don't have to take out life assurance, it's advisable to set up a policy. SPF can provide independent advice for all your insurance needs.

Applying for a mortgage


It is advisable to arrange a mortgage in principle before committing to a purchase. This will enable you to find out how much you can borrow, so you don't waste time looking at properties beyond your budget. Even if you haven't found a property that you wish to buy, our international division can help you to establish your affordability and issue an approval in principle based on your current financial situation.

If you have already found a property, we will send you a full application pack via email or in the post. If the property is still under construction, we can keep your file open until you tell us it is ready.

For more information about obtaining an overseas mortgage please select one of the following countries listed below: 

Countries that we Cover