Buying property in Florida? Financing Florida luxury villas
So, you have been looking at Florida luxury villas and you think you have finally found the right one for you. If you do not have the money to buy property in Florida outright, you must think about how to finance your purchase in Florida. Luxury villas and other property purchases are most commonly funded by either a UK or Florida mortgage.
Arranging finance to buy Florida luxury villas
Not many people are affluent enough to buy property in Florida outright and even those who are, may choose not to for tax or other purposes. If you must take a loan to buy property in Florida it is recommended you receive pre-approval for a mortgage before you start looking at Florida luxury villas. That way you know exactly what you can afford and you need not waste time viewing Florida luxury villas outwith your price range.
Taking advice from financial and legal professionals will help you evaluate the tax and currency implications of taking a UK or Florida mortgage.
A Florida mortgage on your property in Florida
Non-residents will be expected to pay at least 20% of the price of a property in Florida as a deposit. Also, non-resident will not be lent any more than 70 to 80% of the value of the Florida luxury villa. The Florida mortgage will be secured on the property in Florida you are buying, meaning your UK assets will not be put at risk in the event of default.
Most Florida mortgages are of either fixed or adjustable rates but there are a number of innovative products available which may suit an overseas investor. When you buy a property in Florida with a mortgage, the payment timetables available are generally over 10,15 or 30 years.
The minimum sum which you can borrow to buy a property in Florida is $50,000 and the maximum is $1,000,000 with credit rating and income taken into account. Interest rates vary but they are generally at competitive levels.
Buying a property overseas with a UK mortgage
A mortgage must be secured by property in the same country. To obtain a UK mortgage for property in Florida you would therefore need to remortgage your main UK residence and release equity to buy the property in Florida.
UK banks are willing to lend a far higher percentage of the cost of Florida luxury villas and other properties than you would get from a Florida mortgage. There is less to pay in set-up fees but the interest rate is higher than in some countries.
Before deciding on a UK or Florida mortgage you need to take into account issues such as currency fluctuation, tax and general economic factors. When buying property in Florida your own individual circumstances will decide which option is better for you. Making the right decision at this stage can save you thousands of pounds which could be better spent on Florida luxury villas.
