Money for housing under the palm tree can be obtained in the country of property purchase
There are no mortgage programs for financing foreign real estate in our country today. Banks offer long-term loans secured by existing property. "In this case, the collateral can be not only an apartment but also a country house, as well as non-residential property, or bank collateral property," notes Alexey Lyubchenko, director of the retail lending department of the bank.
But does it make sense for a citizen to pledge, for example, their apartment or other real estate to get a loan here? "It is much more logical and cheaper to use the services of a bank in the country of property purchase," says Ekaterina Tein, partner and director of the residential elite real estate department at Knight Frank. "To obtain a loan from a foreign bank, foreign guarantors are not needed. As a rule, the bank simply requests a certain package of documents, mainly to confirm the client's creditworthiness and the cleanliness of their financial history. Our citizens usually do not encounter difficulties in obtaining a mortgage loan from foreign banks."
However, not all countries have resolved the issue of mortgage lending to foreigners. In Bulgaria, Montenegro, the Czech Republic, and Turkey, banks are developing special programs, but they are not yet being used, says Yulia Titova, head of the foreign real estate department at BEST-Real Estate Corporation: "It is expected that next year, some Bulgarian, Montenegrin, and Czech banks will give loans to foreigners at 8-9% per annum under the guarantee of the developer company for a term of 5-10 years."
Real estate companies provide full support in obtaining a loan. "This assistance usually involves overseeing the process - providing information about banks and their lending conditions, choosing a bank, collecting and transmitting all necessary documents," explains Zhanna Gusein, head of the foreign real estate department.
Each country has its own requirements for non-resident borrowers. Before applying for a mortgage loan in Italy, it is necessary to find a property. "The bank will consider the application only when the buyer is ready to sign a preliminary purchase contract for the property," says Larisa Khoreva, general director of Avenue Property. "To obtain a mortgage loan, non-residents must notify the property owner of their readiness to acquire the property, collect income statements and property documents, obtain preliminary consent from the lender, accept an inspector to assess the property (the inspector is appointed by the lender) and pay for their work, and also invite a notary to oversee the transaction process." The notary must confirm that the property is free of any encumbrances. The mortgage agreement is signed together with the purchase and sale contract.
Real estate in Germany can be purchased by both individuals and legal entities. "Getting a mortgage loan is quite simple," says Mark Korobov, director of Asfina agency. "Loan rates range from 4.5% to 5% per annum. The rate depends on the size of the down payment: the more guarantees the bank has, the lower the rate. The purpose of the house is very important. If it is income-producing, i.e., brings profit (for example, from renting out), then the rate may also be reduced. Property insurance is mandatory."
In France, the size of the mortgage loan depends on the purchase price of the property. "The mortgage loan is issued for the selected property to people under 80 years old," notes Larisa Khoreva. "The package of basic documents required to request a mortgage loan from French banks includes: a passport, a certificate of residence for the last three months, a pay slip showing monthly salary for the last three months, tax returns for the last three years, a declaration of land income and rents, sources of other income, a bank statement with transaction descriptions for the last three months." In addition, one must provide a certificate of ownership of the dwelling, additional information about the client (brochures, advertisements, articles), a certificate of savings, securities, participation in investment projects, a marriage or divorce certificate.
In Latvia, banks are stricter in assessing the legality of clients' income. The client must make a down payment of at least 10% of the financing amount. Currently, interest rates on mortgage loans in Latvia average 1.5-2% per annum, plus an interbank rate (for example, Parex banka offers to use a six-month rate, which as of August 13 was 4.51% for euro loans). Loans are offered in the national currency (lats), euros, and dollars. The most popular is the euro, since the interbank rate for this currency is lower than others. The available loan term is 25 years, and it is the most popular among clients.