Overseas property investors 'need to consider mortgage options with care'
Property investors looking to buy homes overseas should carefully consider where they should take out their mortgage, according to new claims from an industry body.
The Association of International Property Professions (AIPP) has said that there are various benefits associated with taking out a mortgage in the UK or in the target country.
In the UK, for instance, more products are available that offer higher percentage values, reaching up to 90% or even 95%, the association noted - although it also said it is a "good idea" to have the property assets and the debt denominated in the same currency.
However, AIPP warned that there are some financial risks associated with foreign property investment when using two or more currencies.
Paul Owen, chief executive of the AIPP, remarked: "The possible downside of that is that if you're earning money in UK sterling and paying a mortgage in euros, then you run the danger of exchange rates change making a difference to your payments."
Recently, foreign exchange company HiFX suggested that the use of forward contracts could save consumers money by 'fixing' the exchange rate during the months taken to complete property purchases. This could be of particular advantage right now, given the high strength of sterling.
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