Borrow in France for a real estate purchase in Spain or PortugalOn October 5, 2019 by admin
Many tricolores seek to buy abroad, especially in southern countries such as Spain or Portugal, here’s how to finance a real estate purchase abroad.
Real estate purchase in Spain or Portugal
The real estate market in Spain or Portugal can be interesting, whether to buy a property as a second home or simply consider a peaceful retirement in the sun. The price per m² remains very attractive in the different cities of both countries, whether for a purchase in the old or for a purchase in nine. One can for example find an apartment with a surface of 100 m² on the “costa brava” to less than 150 000 euros, very interesting investments.
However, it is necessary to define the financing methods and in particular to take into account the local taxation. For example, Spain imposes a property tax of 24.75% on non-residents. Portugal imposes three taxes on it: the municipal real estate tax (IMI), the municipal real estate transfer tax (IMT) and the tax on stamps (IS).
Can I take out a mortgage in France?
If you are considering a real estate purchase in Portugal or Spain, it is not easy to take financial steps in these countries, especially if you do not speak the language. The idea is to rely on the tricolor market to obtain financing. French banks are rather open to the idea of offering financing for borrowers interested in buying abroad, however, we must define the type of financing because a guarantee will be required on real estate.
There is the possibility of resorting to a mortgage, that is to say to subscribe a home loan whose guarantee will be taken on the main property in France, this mode of financing is ideal during a purchase in secondary residence it will simply be necessary to rely on the mortgage rate to define the maximum amount to borrow. The other solution is to guarantee the mortgage loan through a pledge, it is a guarantee that rests on a life insurance contract. Finally, buying abroad often requires the provision of personal guarantees, such as a financial contribution for example.
Simulating a home loan to buy in Portugal or Spain
The first fundamental step before buying abroad is to define its borrowing capacity, that is to say that the simulation of the home loan will help inform the borrower about the amount that he can get but also on the terms of repayment. A home already having credits in progress will eventually be able to go through the credit consolidation in order to obtain its financing.
It is therefore sufficient to submit an application for a mortgage by specifying the desired amount but also the nature of the purchase, the comparators allow to request banks specializing in the purchase of real estate abroad, they are therefore able respond quickly to the funding request and issue a feasibility opinion. Note that this approach is completely free and without commitment.
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