Acquiring an overseas property for your retirement is an exciting adventure to embark on.
It is one of the best risks to take in order to secure a better future for yourself and children. Nevertheless, it may come with few challenges and one of them has to do with coming up with the money or cash for your property.
According to the Corcoran Group, an American real estate firm, the average price of all apartments in Manhattan is about $916,000. The average price of a one-bedroom apartment in Manhattan is $710,000.
The pricing of houses seems to be expensive especially to the average income earners. However, it shouldn’t deter you from acquiring a home overseas. Once you are on a reliable payment system either as a government worker or a worker in a reputable company, you can own your dream home without necessarily having so much cash at hand.
There are quite a few options when it comes to financing overseas property or real estate, whether you want to buy purposely for your retirement, for a holiday home, or an investment property while your child studies abroad.
The best approach is to arrange an overseas mortgage with your local bank. As you work on getting a mortgage, make sure you understand how much you will be requesting, and how much you will have to pay back by using a Mortgage Calculator. Let’s look into detail what a mortgage is, and how we can do the calculations.
What is A Mortgage?
As defined by Investopedia, the term mortgage refers to a loan used to purchase or maintain a home, land, or other types of real estate. The borrower mostly agrees to pay or settle the lender over time, typically in a series of regular payments that are divided into principal and interest.
What is An Overseas Mortgage?
An overseas mortgage is any mortgage you take out on a property that’s not in your country of residence. It can be from a local bank, or from an overseas lender in the country you want to buy in. Your approach will depend on your personal and financial situation, so it’s important to do your research. Weigh the pros and cons of each option to help you decide.
You might be surprised about some of the perks that can come with owning overseas property.
Arrange an overseas mortgage with your local bank
The first step I personally recommend you take in order to help you acquire an overseas property is to arrange an overseas mortgage with your local bank.
Most local banks offer international banking services and can help you arrange an overseas mortgage. You’ll need to check that they support your chosen country or territory.
Always keep in mind that buying an overseas property can be a very complex and difficult process as compared to buying it locally and that’s why you need an expert in that field to assis.
Other things such as foreign ownership laws; tax rules; foreign exchange fluctuations; planning permission; your exit plan, should you ever decide to sell; and insurance are key areas your local bank will help you to understand.
Determine the Total Home Cost using a Mortgage Calculator
I humbly advise that even before approaching your local bank, you get a fair idea of the total cost of the mortgage, principal and the interest rate. This can be done by simply using a mortgage calculator.
The Mortgage Calculator is an advanced automated calculator which automatically calculates your total home cost, the total mortgage cost including the interest, your interest alone, your total number of repayment months and your total monthly repayment.
How To Use The Mortgage Calculator
The calculator is very simple to use and straight to the point. Kindly follow the steps below.
Step 1: Enter the price of your preferred home in the first box on your left labelled as ‘Home Price’. Let’s say $916,000.
Step 2: Enter how much you have already paid for the house or how much you have available for the property in the ‘Deposit’ column.
Step 3: Enter the amount you’re seeking to borrow as a mortgage in the ‘Mortgage’ column
Step 4: Enter the average interest rate for such services in the ‘Interest Rate’ column.
Step 5: Write the number of years you wish to repay the loan in the ‘Term-Years’ column.
Step 6: Finally, click on the ‘Calculate’ button to see the results listed on the right side.
The world keeps changing and we must alway respond by playing smart. If you get the opportunity to be working and earning on a monthly basis, the best thing to do is to plan ahead for your retirement.
Buying or owning your home overseas is not just an element of pride. However, it gives you comfort and peace of mind while you go about your daily activities. It is also one of the best investments for yourself and children.
The best is to start planning early. Talk to your local bank, calculate your payment and start investing into your retirement.