Can overseas property debt affect my chances of buying a property back home?

OVERSEAS PROPERTY DEBT

OVERSEAS PROPERTY DEBT

A frequently asked question we get at EU Property Solutions is whether an overseas property debt issue can affect your ability to buy property in the United Kingdom or your home country. There are circumstances in which it might.

The first thing to bear in mind is that it’s always a good idea to cooperate with your lender when you find yourself in distress. Many borrowers believe that their only option is to surrender their keys to the Bank and walk away from their overseas property in the hope that there will be no repercussions at home. You could call this the ostrich move, and it’s not recommended, as there are often other options.

In our experience Spanish lenders have been known to place interim charging orders on uncooperative overseas borrowers. If you hope one day to sell your property to fund another purchase, your Spanish lender will have to be paid back first, with interest and charges. That could limit your budget in the UK.

At EU Property Solutions we have also noticed a new type of issue for overseas borrowers. If you have borrowed in the UK to buy a property in Spain, then your mortgage is under the jurisdiction of the United Kingdom. We know of instances where borrowers have defaulted on mortgages taken out in the UK, which has allowed the lender to get the default recorded with the credit agencies on the borrower’s credit file, rather than going through lengthy Spanish Court Processes to achieve a judgment. It is unlikely that any lender will offer a mortgage to a borrower with a default on their credit report, so this can prove disastrous to those who need a mortgage to buy in the UK.

Cooperating with your lender is always recommended.

See the below graphic for the Do’s and Don’ts of overseas borrowing:

If you are experiencing difficulties with an overseas property issue or are concerned about the impact an overseas debt could have on a potential property purchase please call EU Property Solutions today on +44 (0) 330 124 1230 for expert advice.

* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).
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About EU Property Solutions

EU Property Solutions assist borrowers with overseas property issues across Europe. We specialise in the Spanish Property market solving Negative Equity issues. Our team are experts in assisting overseas borrowers out of Negative Equity and have achieved results with numerous Spanish lenders. We pride ourselves on the relationships we have built with our clients and the institutions we work with thanks to the efforts of our legal team in Spain. EU Property Solutions offer a free initial consultation and tailor our advices to your circumstances. Our UK office base is in Leeds with other locations in Belfast and San Pedro on the Costa del Sol.