Sterling/Euro Mortgage Advice Which Can Help Buyers Of Property In Normandy
English-language foreign property websites are good place to start a search for property in Normandy, or any other region in France. Those who plan to buy a home in France may have a number of different motivations.
Some may be looking for a holiday home, or a retirement home. Others see homes in France as a good investment. Prices are often much lower than equivalent property in the UK, and homes in popular tourist destinations can be rented out during the summer. Additionally one will often find rural properties in fairly poor condition, available for very little money, and those who have the skills to renovate those properties may realize a substantial profit on resale.
People who are thinking of buying a property in France need to be fairly cautious, and carry out careful research, before making any irreversible decisions. When buying abroad one does not wish to be surprised by any hidden costs, which might not apply when buying at home, and ownership of a foreign home involves contact with a different and unfamiliar legal system.
The consumer group Which? have issued a useful guide to those who are considering buying a home in a foreign country. This can be found either on their website, or in bookshops. As well as explaining hidden costs which buyers might face, it gives useful tips on how to arrange a mortgage for a foreign property.
There are several options for arranging a mortgage. Remortgaging the family home in the UK is the simplest option, but of course someone doing this risks losing their home if they are able to make the repayments. The second option is to borrow the money from a UK bank, but secured against the foreign home which you are buying.
Only a small number of banks provide this service. Those that do are usually the ones which have a network of offices in the foreign country in which the property is located. The market for mortgages of this type is regulated by the Financial Services Authority, which gives extra protection for the buyer, in that they are entitled to redress if the mortgage was mis-sold.
The third and final option is to use a specialist broker, who can arrange an overseas mortgage. The IFA "Unbiased" website can be used to contact a suitably qualified Independent Financial Adviser in your local area.
The sale of overseas mortgage products is not subject to FSA regulations, so buyers risk not being able to get redress in the event of problems. Those taking out an overseas mortgage will have the choice of borrowing the money in sterling or in euros. Those who are using the property to obtain a rental income, will often be receiving that income in euros, so for these buyers a euro mortgage would be the best option. A sterling mortgage would probably be recommended for those who will be making the repayments out of a UK salary, or a UK pension. This option would provide the best protection against currency market fluctuations.
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