Your Questions Answered
How to buy a property abroad
More and more people choose to take a Euro mortgage on their home overseas
as opposed to releasing equity from their own home in the UK. Apart from the
fact that historically Euro interest rates have been lower than the rates in
the UK, this makes even more sense if part or all of your mortgage is going
to be met by Euro rental income derived from the property.
Whatever the reasons behind your decision to borrow for the purchase of your
overseas home, we aim to make the process as easy to understand and carry out
as possible.
1. I want to buy a property in one of the less discovered markets in Europe
but don't have time to go myself. What is the best alternative?
In terms of practically sourcing and concluding a purchase transaction, it
can all be done from the UK as there are a number of selling agents operating
in the UK, many property shows that you can visit and thousands of properties
for sale over the internet. If you intend to live in the property one day, it
is highly advisable that you do not buy without going yourself or asking a trusted
member of your close family to go on your behalf. If you are purchasing the
property purely as an investment, carry out extensive research by reading as
much as you can about the country and the local real estate market. Find out
all you can about the country's politics, economy, relationship with neighbouring
countries, legal framework, future plans, etc. Finally, visit the UK embassy
or consulate of that country and obtain as many recommendations as you can of
professionals that you will need before, during and after your purchase.
2. How can I apply for an overseas mortgage with Piraeus Bank in the UK?
Firstly you’ll need to establish whether your circumstances satisfy our lending criteria under our overseas mortgage terms. This can be done using our online application facility, or you can complete and send us a paper-based version for us to make a manual assessment.
Once you have been told that you meet our lending criteria you need to complete and send us a Mortgage Application Form, together with a number of other documents (click for a listing for Bulgaria or Greece), for us to proceed to underwriting.
After your application has been underwritten, we will arrange for a valuation to be carried out on the property. Assuming that your application has been successfully underwritten and the valuation is to our satisfaction, we prepare and send you a written offer.
As part of your loan facility, you will be asked to complete a drawdown notice. This is a simple form which instructs us to disburse the funds and provides details of the seller's bank account, your own local account number where we need to transfer the funds for your purchase, or your UK bank account if you are releasing equity from your overseas property.
Depending on whether you buy a resale property, off-plan or commission your own house to be built for you, the mortgage process can vary from four weeks to as long as your house takes to be built if you need to make stage payments.
3. What kinds of properties are you most likely to lend on, and which properties
won't you lend on?
We lend on residential property and also land with planning permission. We
do not lend on commercial property with the exception of loans to property developers
although these are usually processed by the local operations of Piraeus Bank.
4. What are the most important qualifications when assessing a mortgage application?
As a responsible lender, Piraeus Bank will only want you to borrow what you
can afford, and in a way that is best for you. When considering your application,
your current financial circumstances will be assessed before we make a decision
to lend.
It is advisable to make sure you qualify for a mortgage before committing any
cash and we can provide you with a quick decision in principle on this site.
Before you commit to a purchase you should make sure you are aware of the full
costs, as the taxes and other expenses can increase the cost significantly.
Always consider carefully what you can afford to repay and remember that your
ability to repay may be affected by other financial commitments and changes
to your income particularly if you are due to retire within the next few years.
It is important that at the time of application, you make us fully aware of
any personal circumstances that may impact on your ability to repay any lending
you are applying for.
5. If we manage to pay off the mortgage early is there a penalty?
If you find yourself in the fortunate position of being able to repay your loan
earlier than anticipated, fees may apply. Please see our mortgage terms.
6. If we are not at our overseas home for several months of the year, does
the bank require any guarantee that it is being properly looked after in our
absence?
As a home owner you will want to ensure that your property is cared for and
that its value is safeguarded and ideally increased.
We do not ask for a specific guarantee in respect of the maintenance of the
property. However we would require that no structural works are undertaken without
their consent or that nothing is done which may put the property at risk.
7. We are planning to buy an old village home. How much documentation does
the bank need regarding proof of ownership? The house has belonged to several
branches of the same Greek family.
In the first instance it is important to establish if that the property will
be considered suitable security by the bank as depending on the condition of
the property it may not be mortgageable. Another consideration is where the purchase
price is very low then it may fall below the minimum loan amount.
With regard to proof of ownership, the lack of a Land Registry in many parts of the country means that conveying title to property under Greek law requires the seller to provide certain specific documents which support the transfer. The documents vary depending on the method by which ownership had previously passed to the current owner e.g. implied inheritance, parental gift, self–occupation etc. Your solicitor will review these documents, carry out all the necessary searches and advise you whether they are acceptable for the purpose of proving ownership and you will have the added comfort of the bank's lawyers having also satisfied themselves as to the seller's title.