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A mortgage for an apartment abroad
Many investors in Israel have started to pay much more attention over the years to investing in foreign properties as a path of investment. In contrast to mortgage regulations regarding purchasing a property in Israel, the process of taking out a mortgage may be more complex for foreign property investment. This article will answer some questions that you may have on the subject and provide information about getting a mortgage for a property abroad.
Mortgage for a Foreign Property – What is it and How to Use it
A mortgage is a specific type of loan taken from a bank directly for the purpose of purchasing property. The difference from a regular loan is that the property purchased with the loan funds is pledged to the bank until the loan is repaid. After that, the property belongs to the buyer. Even before the mortgage is repaid, the buyer can use or rent out the property. Even if the buyer has a mortgage in Israel, they can still take out a mortgage for a foreign property.
Banks in Israel allow for taking out mortgages for purchasing properties abroad. There is also an option to turn to a non-banking financial company for the mortgage. Non-banking financial companies tend to be more lenient in giving out mortgages than banks, as the risk for them is lower. This means that a non-banking financial company may have lower credit requirements than banks.
The Process of Taking out a Mortgage
Unlike a mortgage for properties in Israel, a mortgage for properties abroad creates additional complexity. Unlike some mortgages in Israel, the property that the bank processes is a property that the buyer already owns in Israel. In other words, a person taking out a mortgage for a property abroad needs to mortgage their existing home in Israel in order to receive the loan for the foreign property.
Mortgages in Europe – What types are available and what is the most worthwhile?
Mortgages in Europe can come in several forms, depending on the agreement with the bank. An interest-based mortgage, for example, requires proportional payment to the income the property produces each month. This serves apartments purchased for rental purposes and allows for payment at a rate that guarantees profits. A foreign currency-based loan is tied to the value of a foreign currency and determines the monthly repayment according to the currency rate. Due to the complexity and risk involved in taking out a mortgage in Europe, it is advisable to seek the assistance of a mortgage advisor. The advisor can help clarify accurate details regarding the terms of the mortgage in Europe, determine the transaction value, choose the most cost-effective mortgage option, and keep track of additional expenses that may arise. Many Israelis also tend to seek the assistance of an Israeli escort who can assist them with all the necessary steps that need to be taken abroad, such as reviewing the apartment and completing the sales procedures.
Obtaining a mortgage for an apartment abroad – In Slovakia
Slovakia does not limit foreign investors in real estate transactions, making it a good land for investments. A foreign resident in Slovakia can relatively easily obtain a mortgage if they have the required stable income.
However, foreigners with temporary assets may encounter difficulties in obtaining a mortgage or loan. The most convenient option in this case is to obtain an indefinite mortgage. This is a mortgage that is similar to a regular loan, and almost all banks in Slovakia provide it. The most important part is that this loan does not require the presentation of a specific property for purchase in the initial stages. This is quite a unique case and not available in all countries of the Union, which makes Slovakia a preferred option for taking out a mortgage in Europe.
The process begins with going to the bank and submitting a request with identification documents. The bank then uses its access to the database of the Kingdom Insurance Company, which calculates the monthly insurance fees for all people living in Slovakia, whether citizens or foreigners with approval. The bank learns from this data the income level of the applicant and decides whether to issue the mortgage.
An indefinite mortgage cannot remain on the applicant’s account for more than three months to half a year. During this time, the applicant must provide the bank with the specific property details they wish to purchase. The bank draws up a mortgage agreement based on this, and the customer presents this contract to their broker.
Another option is to apply for a joint mortgage with a Slovak citizen who has a suitable income. The applicant and the partner jointly approach the bank to take out the mortgage. The applicant receives the money and must repay it, but the partner is there to cover the mortgage for the bank if the applicant stops paying.
In summary
Real estate abroad, especially in Slovakia, is a profitable and stable investment path, and with appropriate advice, investors can take out a mortgage in Europe to cover the investment expenses similarly to purchasing in their country. We would be happy to assist you and provide further information on this subject.
