Paul Nusca – Salesperson at Berkshire Hathaway HomeServices

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    Buying a second home overseas.

    As a world traveler, you may revisit a country area again and again for its beauty, culture, people or lifestyle and decide you’d like to buy a second residence there.

    For your first step, The Philadelphia Inquirer recommends hiring a property lawyer in the country where you want to buy, as well as having a lawyer stateside to advise you.

    Some overseas countries don’t allow noncitizens to purchase real estate, while others allow it, but they may have visa restrictions on when you can enter the country.

    In terms of financing, there are a number of options for Canadians looking to buy abroad.

    Option 1 – there are a number of Canadian banks operating in foreign countries, and a borrower typically must deal directly with the foreign bank office, not a Canadian branch.For the USA, where language and rules are quite similar to Canada, this can be fairly straightforward. In other countries, getting a mortgage locally can be time consuming, exhausting, and expensive. Typically Scotia Bank and HSBC operate in many countries as well as other local options. 

    Option 2 – for many, refinancing your principle Canadian residence and using the equity to purchase your foreign home is by far the simplest finance solution.

    • Up to 80% of the value of your home can be refinanced, for example: if you have a home worth $500,000 and only hold a mortgage of $250,000 you can refinance to $400,000, payoff the $250,000 mortgage and use the other $150,000 to buy a vacation home.
    • The interest rate will be lower because you remortgaged your permanent residence and have no mortgage owing on the vacation home.
    • Makes it simpler and faster to buy in the foreign location.
    • There are no restrictions on the use of the vacation home, such as if used for a rental

    Berkshire Hathaway HomeServices is expanding its services across the globe, and currently has offices in Canada, Mexico, Germany, England, Italy, Spain, Greece, Dubai, Bahamas and India. Contact your Berkshire Hathaway HomeServices network professional for a referral to an overseas affiliate.