International Mortgages.Net are registered mortgage brokers in both the UK and
Florida. As they are not tied to any real estate agencies or banks, they are able to
offer totally independent mortgage advice and to ensure that the whole sale process
runs smoothly from initial approval to closing.
 When considering the purchase of
a property in Florida, or any other
foreign location for that matter,
preparation is the key. The first thing that
should be established is the budget
available. Deposits required, current and
future exchange rates, total cost of finance,
legal fees and tax obligations, should all be
calculated before viewing any potential
properties.
Mortgages can be pre-approved well in
advance, and this could save both time
and money. This can be done by
completing the online decision form at
www.internationalmortgages.net. Many
realtors will not accept an offer, unless it
can be proven funding is in place. For the
purchase of a re-sale property, the closing
date will typically be set at 30-45 days after
the signing of the sales contract, and most
contracts will impose financial penalties for
late closing. Appointing a lawyer, who is
preferably qualified in both UK and Florida
law, may pay dividends at this stage.
Mortgages are normally available to a
maximum of 80% loan to value and for up
to 30 years. There are not normally age
restrictions on mortgages on Floridian
property. If the mortgage is over 75% loan
to value, it would normally be based on
affordability and suitable proof of income
would be required. As a rule, the debt to
income ratio should not exceed 36%,
although there are exceptions to this. For
loans below 75% loan to value, limited
documentation is required and income can
be self-certified.
The mortgage secured against the
Florida property, can be in either US
Dollars or Sterling. The currency in which
the mortgage is arranged would normally
be determined by the currency of the
income being used to fund it. A qualified advisor from International Mortgages.Net
would talk through the options and advise
which was most suitable.
A US Dollar bank account will need to
be opened, to enable the payment of local
taxes, utility bills etc. Some lenders also
require six months mortgage payments to
be held in your account before closing.
Exchange rates can greatly affect the
cost of an overseas property purchase.
Deposits and closing fees would normally
be converted from Sterling to US Dollars.
Registration with a currency exchange company would be prudent, as funds can
be booked up to 18 months in advance.
This is particularly useful should the
purchase be off-plan, as it allows these
cost to be “fixed”.
If a Sterling mortgage has been chosen,
the exchange rate can greatly affect the
Sterling equivalent of the mortgage. The
loan is converted from USD to Sterling at
the exchange rate on the day of closing. For
example, based on a loan of $200,000, at
1.70, the Sterling equivalent would be £117,647 and at 1.85 £108,108; saving £9,539. It should be noted, that exchange
rates would similarly affect this loan upon
the sale or re-financing of the property. USD
would need to be converted to Sterling, to
redeem the outstanding loan, and this can
have a very positive effect if the USD is
stronger when selling/redeeming, than
when initially purchased.
Closing fees are costs associated with
the purchase, such as taxes and
insurances, and would initially be listed on
a good faith estimate and at closing on a
HUD1. As a rule these would be
approximately four percent of the purchase
price for a newly built property and three
percent for a re-sale.
It is possible to purchase a property in
Florida without a lawyer, by using the
services of a title agent. A lawyer would
normally cost around one percent of the
purchase price and should be seriously
considered, especially if the purchase
involves a number of parties, such as family
members.
Finally, we come to tax, which is
payable not only on income, but also on
capital gains. Mortgage interest and other
costs can be offset against this, however a
tax advisor should be consulted, just to
make sure.
Please contact
us for more information and an application pack.
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