When looking to invest in an overseas property you might want to consider looking at using other people’s money instead of your own. Many people pay cash when in fact they may be more beneficial borrowing it at a reduced rate and keeping hold of their own money which could well be put to better use and be making more money elsewhere.
We are not financial advisers and cannot advise you what you should do but we can give you some guide lines so that you can decide which way is best for you. You should always seek the advice of a professional financial adviser before you take out a loan.
If you are seriously thinking about buying a property in Tenerife you should look into the various ways of raising finance.
Spanish mortgages
People can often save money by taking out a Spanish mortgage in Euros but this is not always the case. You should check the rates and conditions before you buy to make sure which option is the best one for you.
There are often incentives for non-residents to borrow money and invest in property in Spain. If you are buying a property direct from the builder via your agent is also very likely that you can transfer the builders’ mortgage over to you and take advantage of their extra special rates of interest. Ask you agent about this before you buy, and always get proper legal and financial advice.
UK mortgages
If you own a property in the UK (or any other country for that matter) it may be worth you talking to a mortgage broker to see if it is possible to take out some equity from your property and therefore pay cash in Tenerife. The benefit of this is that you will be a in a strong position to negotiate when buying because you are a cash buyer and should in theory be able to move quickly. Some vendors will be looking for a quick sale and maybe reduce their price if a quick deal is available to them.
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