Find your funds before you fly.

Make the most of your time abroad by working out your finances in advance.

Preparing to finance property purchases using a foreign lender can be a scary business but you can save time and money by heading overseas with a better idea of the resources they need.

If you’ve considered the equity on your UK home, and choose your foreign mortgage well, you could treat yourself to a luxurious property, or view a really fashionable location!

It usually takes longer to arrange mortgages abroad. Lenders often pay intense attention to detail, but being prepared can make the process easier. And don’t forget that the lenders’ thoroughness protects your investment, as well as theirs. The points below will help you plan your paperwork:

Loan to valuation
All countries vary, but the average amount you can borrow is 60%-80% of the valuation or purchase price. You can find the deposit from your savings, re-mortgage your UK property or take out a loan. Whichever method you use, you’ll need proof that you can pay the deposit. If you’re borrowing to fund the deposit, it will affect affordability criteria (see below).

Interest rates
A number of countries have lower rates than the UK, but others are higher, so using the equity in your UK residence(s) may be a cost-effective solution. You need to decide whether to secure everything against your own home, and may prefer to choose foreign lending, even if the rate is higher.

Criteria
There are only full status mortgages available from many foreign lenders. You will have to provide evidence of your income - P60s and payslips – and confirmation of employment. If you’re self-employed, you’ll need to show accounts and tax assessments, usually for two years. Lenders do not work on multiples of income, but an affordability equation (a sample equation is below).

Affordability
This takes into account your total income, minus outgoings, and is vital to the underwriting decision. A lender, for example, may insist on your monthly expenses (food, bills, school fees, credit cards, existing loans and mortgages) being no more than a % of your income. Most countries use a complex calculation which changes from lender to lender – always ask your agent or mortgage broker how they work out affordability where you’re thinking of buying.

Documentation
Underwriting will not take place until all your documents have been received. These will include mortgage application forms; bank details; proof of deposit or down payment; a full description of the property - brochure, plans, and estimates; the owner’s attestation if construction is completed; title deeds or purchase agreement for the land, and many other personal and property documents.