Real Estate Abroad: Securing a Mortgage for a Home Overseas

Many Americans dream of owning a home overseas, particularly since real estate markets abroad often fair better when American markets begin to plummet. Whether you're interested in investing in a home in another country or you are looking for a vacation property, securing a mortgage for a home overseas can be tricky.

Most American mortgage lenders will balk at the idea of financing a home overseas because they have very little recourse should you default on the loan. Some mortgage companies advertise that the specialize in mortgages abroad, but you have to be careful about these lenders because the interest rates can be exorbitant. Scammers have infected the American real estate market, so be careful about doing business with a lender you don't know.

There are a few legitimate American lenders who finance homes in Canada and Mexico, while a few others specialize in homes in South America. IMI Group in Phoenix, AZ is one example (imigrou.us), and Collateral International (collateralinternational.com), in Birmingham, AL, is another. If you work with an upstanding institution that specializes specifically in securing mortgages for overseas homes, you stand a better chance of getting a favorable interest rate.

It is also possible to find a mortgage company in the overseas country where you plan to purchase a home. Some financial institutions are more than happy to work with Americans. This might take several extra hours of research as you talk with potential lenders in other countries---not to mention the ridiculous long-distance bill---but it can be worth it if you are serious about buying a home overseas.

Unfortunately, however, mortgage lenders in other countries typically expect shorter mortgage lifespans. While a thirty-year mortgage isn't uncommon in the States, five years is often the maximum abroad. You must be able to pay the house off in your current financial position in just a few years if you want to take this route. They might also expect higher down payments, often in excess of 50% up front.