International Mortgage Lenders

It is possible for people who want to buy a home or second home in a foreign country to get a mortgage there.

This kind of mortgage is called an international mortgage it’s a product designed so a resident of one country can purchase real estate in another. These mortgages are issued by mortgage lenders who specialize in operating in more than one country. Many of these international mortgage lenders prefer to work with more affluent individuals.

No matter what country you are in all mortgages work pretty much the same. You take out a loan to purchase a piece of real estate and the lender keeps the deed to the property as collateral for the loan. Then you make a payment that includes a portion of the principal of the mortgage and added interest each month to pay off the mortgage.

International Mortgage Concerns 

Even though the basic principle behind a mortgage is the same almost everywhere the laws and other factors affecting real estate and mortgages differ widely from country to country. You should always become familiar with local law before taking out a mortgage in a foreign country.

For example in some countries, such as Mexico, it may be illegal for non citizens to own or purchase land.  Other nations may have substantially higher taxes including sales taxes that can affect mortgages and purchase of land. Canada has a high national sales tax and high provincial sales taxes.

Some nations also have a Value Added Tax which is a national sales tax that affects all products on levels of the sale. There may be vast differences in the court system and financial system as well. Added layers of government regulation and registration may exist.

Getting an International Mortgage

When you get an international mortgage you should always work with a mortgage lender that specializes in the country you are purchasing property in. You should locate a mortgage lender who is familiar with the local law, the local business practices and the local real estate market.

You may have to make special arrangements to pay a mortgage if you are living in one country and buying land in another. This means you might have to make a payment to a bank in one country that makes a payment to a bank in another.

Currencies

One major concern will be the currency you pay the mortgage in. If you have to convert the mortgage payments into a foreign currency you could lose money. If the foreign currency is worth more than the US dollar in international exchange you could end up losing money.

This means that you may have to open a bank account in the foreign country just to make your mortgage payments. It may also mean that you have to engage an agent such as a lawyer to make the payments for you.