Disadvantages of an Overseas Mortgage
The main disadvantage that can be discouraging about overseas mortgages comes from
the fact that it uses another currency. This adds a relatively thick layer of risk
into your investment. With this set-up, you earn in sterling pounds and pay in another
The sterling pound equivalent of your debt in another foreign currency will surely
fluctuate with time as the exchange rates go up and down. If you are unlucky, and
the rates move against you, the sterling equivalent may become so low that you actually
end up with so much more debt than you originally had.
Another disadvantage to be pointed out with getting an overseas mortgage is the
physical and communication barrier that exists. If you buy a property in Cyprus,
for example, you would need to visit the country at least once to arrange your paperwork
or to personally attend to matters regarding your mortgage. (You can ask a lawyer
or solicitor, but nothing matches being fully aware.) Also, in countries where only
few people can speak good English, communication will prove to be difficult.
There is definitely no room for miscommunication in mortgage application and processing,
either oral or written. You will need to demand all transactions and documents be
written in English. Which one is better? One can not say that getting a UK mortgage
is better than getting an overseas mortgage. What is good for you may not be good
for another. While UK based mortgages are generally easier to proceed to (considering
how used you are with the system), the rates can be very slightly higher.
On the other hand, overseas mortgages may prove lower in terms of interest rates,
but the additional procedures, permissions, and other complicated systems may take
more effort, time and money on your part. The best thing to do is to consult an
independent specialist who can offer you objective advice on your options considering
your current circumstances. Remember that all decisions about investing abroad should
be informed and wise, and more importantly, realistic.
Decision in Principal Application