Financing an investment?

[chappers]

Hi, am new to overseas property investment.

I am in the early stages and am doing a lot of research.

My question is this. I have a relatively small mortgage on my home here in the uk, and currently a lot of equity (approx. £200K). Lots of people keep telling me i am in a good position to invest in property. Am I ? Is using equity in your home, in order to finance an overseas property investment, a wise idea ?

And also, can anyone give me a basic illustration of how the finance would work, what i would pay, when, how much per month etc etc, so i can get a real rough idea on how the costs etc would pan out.

 

[andyk2]

Basic Guide to Financing an Investment

Wow! A little too much detail to go into in one post, but basically, if you are going to borrow money against your house to fund an investment property, you have to be certain that a) you can comfortably afford the repayments, and b) the yields and growth that you get from your investment property are more than the interest you are paying on your equity release.

It is also well worth looking at what rates are like in other countries before choosing to take out a loan on your property - for example, interest rates in the UK are considerably higher than in Europe or the States. So, it may be in your interest to take the minimum in the UK and maximum mortgage in the country you are investing in.

Not every country that is open for foreign investment has finance. Brazil for example is a cash-only investment. Finance is a relatively new product in Cape Verde, Morocco and Turkey, and "interest-only" is practically unheard of outside of Europe.

I saw that you enquired about French lease-backs, and I´ll answer some of your points on that thread, but to give you an example of the varying nature of mortgages, French banks will give you up to 104% of your purchase on a leaseback investment, but only 85% on a "regular" investment.

Hope this helps rather than confuses.

Andy