Q: We are thinking of buying a property in Orlando that we can use for holidays but also rent out the rest of the time - we view this as an investment for the future. Where is the best place to start looking for a US mortgage, and is it easy to arrange this kind of thing?
A: David Hollingworth is a mortgages expert at London and Country Mortgages in Bath.
Although you could try to arrange the finance on the US property by yourselves, it makes sense to seek some assistance from a broker.
There are specialists in the overseas market. I would recommend Simon Conn, an overseas property and finance specialist who has been in the business for 30 years or so. His contact details are email@example.com.
A specialist will be able to find the best solution and rate for your needs, and ensure you don't fall foul of any pitfalls.
There are a number of issues to bear in mind when considering how to fund the purchase. If you use a US lender (direct or through a broker) then the mortgage will obviously be in US dollars. If your income is in sterling then the monthly payments and the mortgage will fluctuate in sterling terms as exchange rates move, as well as being affected by interest rate movements.
That could work in your favour or against, but it's an important consideration. Some prefer the mortgage in the same currency as the property and others in the currency in which they derive their income.
If there is adequate equity in your main residential UK property, it may be possible to raise funds by remortgaging your UK property to buy the US property outright. Bear in mind that you will be buying under a totally different legal process from the one that applies in the UK, so it is vital to take independent legal advice on the purchase.
There are countless horror stories of borrowers not reading or understanding contracts properly. A good broker should be able to recommend a suitable legal specialist to represent your interests.
Finally, shop around for a cost-effective way to transfer your money overseas. Foreign exchange specialists such as Moneycorp can offer more competitive rates than those available from your usual bank.