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What to Consider When Buying Overseas

Buying overseas can be a very worthwhile investment, as long as you inform yourself thoroughly on what it takes to buy and own a property on foreign land. Here's what you need to consider before investing in a property abroad.

Arranging an Overseas Mortgage

If you are looking to get a mortgage on a home overseas, you can arrange this either with a UK bank or an international lender. Generally, UK banks will only enable you to get a mortgage out on a foreign property if they have branches or offices in the country which it is situated in.

For this reason, it is usually easier to get a UK mortgage on a property in Europe than it is if you were looking to buy further across the globe.

Alternatively, you may use a foreign mortgage broker to fund your overseas mortgage. When borrowing in a foreign currency, you must remember that you will be subject to fluctuating exchange rates and charges.

Mortgage rates will differ from country to country; do not assume you will be operating within the remits of UK prices. As a further note, some countries require a larger deposit than typical UK requirements to be paid upfront when purchasing a property. You may be expected to pay a deposit as large as 40% of the property price.

Buying Overseas for a Holiday Home

Many Brits buy second homes abroad as a place to retreat and relax in the summer months. Holiday homes are generally considered a luxury, but they can also prove to be very lucrative. Many buyers will rent out their holiday homes when their properties are not in use, such that they can avoid losing money on expenses throughout the year.

With holiday hosting homes such as Airbnb being so popular today, it has never been a better time to invest in a holiday home.

When considering buying overseas for a holiday home, it is important to consider the following:

  • how much use will the home get?
  • is it in an area that might attract holiday rentals?
  • how expensive will it be to maintain the home?

If you are likely to be able to travel to your holiday home multiple times a year, it will be far more worth your while than if you are merely using it as a one-time-a-year retreat. In any case, it is best to rent it to holidaymakers whenever possible, so you are not paying for empty space.

Buying Overseas for Long-Term Investment

You may be tempted to buy in a country or area where housing prices have taken a significant dip, but it can prove to be very risky long-term if you buy a property within a volatile market.

If you are thinking of buying overseas to go on to sell the property, you need to be careful to time your sale well - only sell the home when you have maximised the equity within it in order to make a decent profit.

You can increase the amount of equity in a home by renovating it, making it far more valuable on the housing market. Overseas properties in hot climates may be easier to sell if you add luxuries such as a pool, a hot tub, or balconies and terraces. Once the sale is made, you can no longer make any further profits from that property.

If you are investing in an overseas home as a rental property, you must consider what it takes to keep a property in good order for tenants. Maintenance fees will apply, and there are many responsibilities involved in being a landlord.

You must be aware of the average rental prices for properties of that kind in that area if you want to avoid either being ripped-off or not being able to attract tenants. You will likely want to consider advertising the property in local estate agents, which will involve costs to consider.

Any profits derived from your overseas property through renting it out will require the payment of income tax. Rental income is taxed differently in different countries - it is important that you become clued up about the mechanisms of taxation in the region you are buying in, and how those mechanisms relate to overseas buyers.

How to Finance Buying Overseas

Many overseas buyers will either use their savings to purchase a second home abroad or go down the route of remortgaging their current UK home to fund the investment of buying overseas.

If you do not want to remortgage your home, but need to release funds to pay for your overseas investment, you may consider getting a Second Charge Loan.

Second Charge Loans enable you to release equity on your existing mortgage without having to remortgage your current home. It is a type of second mortgage, which becomes second priority to your original mortgage when it comes to repayments.

Second Charge Loans can be quick and viable loans products to fund buying overseas.


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How to Make your Home More Energy Efficient

Imagine now that you have got the bridging finance you were looking for and starting to renovate and refurb a new property. It is important to know how to make it as energy efficient as possible because it pays to be green. You can save money on your monthly bills, help the environment and can act as a nice extra selling point.

As we are thrust into the colder months here in the UK, we not only have to think about keeping ourselves and our families warm; we also have to consider the costs of doing so. With regards to energy usage (as well as the arrival of Christmas for those that celebrate it), this is easily the most expensive time of the year. After the horrors of last year’s winter expenditure, you undoubtedly promised yourself that you’d do better on saving energy next year. Here’s how to put that promise into action.

Energy Saving Actions:

  • Seal windows and floorboards
  • Turn down the thermostat
  • Go blanket-crazy
  • Don’t leave items plugged in
  • Replace normal lightbulbs with energy-savers
  • Turn off the lights
  • Switch off your computer monitor
  • Insulate walls and attic
  • Don’t overfill the kettle

Fix Draughts

The first step to warming up your house is to identify where the cold is getting in. Typical offenders are floorboards and windows. By no means do you have to go ahead and get new flooring and window panes: fill the cracks in your floorboard with sealant strips or use a filler product such as StopGap. For your windows, try WindowSkins; a clear membrane designed to stick across the window, creating a kind of temporary double glazing effect.

Save on Heating

Lowering the thermostat is the most obvious way to save energy costs during the winter. Obviously, we still need to heat our homes. Increase the efficiency of your heating by ensuring all cupboard and wardrobe doors are shut; there’s no need for spending on heating unpopulated spaces. Further, turn the radiators down or even off in the rooms that are less in need of being heated (kitchens and bathrooms, for instance).

Blankets, Blankets, Blankets!

Wrapping up never got more comfortable. Make sure your sofas and beds are blanket-heavy so that you don’t have to keep your heating on late at night, and give yourself a further excuse for that heavenly weekend bed-day. Find great deals on blankets at Dunelm or HomeSense.

Unplug

Don’t simply switch off your appliances; unplug them too. Even when nothing is turned on, energy can be wasted by items simply being left in the plug sockets. Further, take items off standby mode (particularly your TV); this could save you up to £30 per year.

Replace your Lightbulbs

Energy Saving Trust tells us that if we switched our halogen lightbulbs to LED lightbulbs, the average household would save £35 a year. Now that LED bulbs have reached halogen-level brightness, there shouldn’t be anything holding you back from making the switch. We’re always being told to turn off our lights when we aren’t using them, but we have to repeat it again. Switch off!

Turn off your Computer

We are all guilty of leaving our computers on constantly; we know it’ll get used tomorrow, so why shut it down only to turn it back on again? It really does save (both economically and environmentally) to turn off your monitor and go through the minor effort of re-starting it all back up again the next day. If you don’t use a computer all day, then turn it off throughout the day when you’re not using it. Turning off the screen only doesn’t count!

Insulate

Fixing your insulation has the propensity to be more expensive, but it is absolutely necessary for a warm, energy-efficient home. If your walls and attic are not adequately insulated your home will lose a lot of heat. Approximately 25% of heat is lost through the attic or roof, and a further 35% through the walls (source: thegreenage.co.uk). Insulate your home so that your heat is kept inside, and your money with it!

Be Kettle-Smart

Overfilling your kettle results in the same water being boiled and re-boiled over and over again, which is a total energy-waster. Use the guidelines on the kettle to decipher how much water you need for what you are making, and be vigilant when boiling; save yourself from forgetting you’ve boiled it already and boiling again by accident.

When it comes to saving energy at home, the cliché ‘every little helps’ really does apply. Whilst making big sweeping changes like buying new environmental appliances and bedecking your place with new flooring will make a huge difference to your energy efficiency, these changes are not always economically viable. Making smaller, incremental changes such as switching to LED bulbs and unplugging items will undoubtedly transform your place into a better environmental and energy-saving home.


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Money Saving Tips for First-Time Home Owners

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Saving on Your Mortgage

  • Do your research when it comes to finding a mortgage provider.

As a first-step, make sure you check your credit score. If lenders see you as a risk, they will charge you more to account for that risk. Look into getting your credit ratings up before taking out a mortgage. Secondly, take the time to contact a number of lenders; do not just go for the first provider you stumble across. Mortgage deals vary enormously and you could end up losing out on a great deal. Utilize mortgage comparison sites, with a particular eye on their administrative fees.

  • Overpay on your monthly payments while interest is low.

If your dealer allows you to overpay on monthly payments, then go ahead whilst you can. There is a potential to save a fair amount by paying more when interest rates are low, such that you have less to pay back when interest rates rise. After all, the longer you take to pay back your mortgage, the more interest you wind up paying. Bear in mind that the larger you pay out on your initial deposit, the lower your interest will be when you come to putting out those monthly installments as the total amount you have to pay back will be lower.

  • Get off Standard Variable Rate 

After your introductory rate, your mortgage provider will likely put you on the (usually expensive) Standard Variable Rate (SVA) if you fail to ask for a special rate. Be vocal with your provider, and make sure you scout out the alternatives that are on offer.

Saving on Utilities

  • Switch service providers

If you have a current service provider from previous accommodation, research the market for better deals. Don’t stick with an expensive provider merely out of convenience. The market is always changing, so looking to switch every three years or so is good practice. If you are looking for a provider first-time thorough research is equally necessary, and you should be aware that switching later down the line will likely do your bank account some good in the long-term.

  • Save on electricity

Simple tricks such as turning down the heating and using energy-saving light bulbs will make your home more energy efficient and thus cost effective. Ensure that window and floorboard draughts are fixed-up, and that your home is well insulated.

  • Save on water

Firstly, make sure there is a fully-functioning boiler in your new place. The maintenance costs of a bad boiler can be astonishing, oftentimes surpassing the cost of replacing one altogether. If your new home has a water meter, the most obvious way to save is to be mindful of your water usage. This is important not only for costs, but for environmental factors also.

Saving on Your Interior

  • Buy online

Sourcing your interior features online allows you to very easily and quickly compare the prices of items using the web, and also offers you reviews on the quality of the items you’re interested in. If you prefer to see items in person, look them up before you go instore to evaluate what else is out there and at what price.

  • Buy Second-Hand

Marketplaces such as gumtree and eBay are great for finding cheap items to furnish your first home. Ask a seller if you can view their item before buying to ensure that it is in good condition. You can save on delivery costs by picking up items yourself.

  • Do your own DIY

If you are up to it, avoid wasting money on hiring in painters and decorators to fix up your place. DIY is far cheaper, and it can also be fun! If you are less confident in this area, see if you can get a friend or family-member to help you with the process. For more specialized jobs, make sure you get multiple quotes before going with a decorating service to be sure as to how much the job should really cost.

Budgeting

A final, and vital way to make sure you don’t overspend during your first move is to budget efficiently. Keep track of your spending by keeping and logging receipts and payments so that you can easily visualize how much money is leaving your account and where it is ending up. Whether you log this on a spreadsheet, in an expenses diary, or in an app, budgeting can save you from losing track of your earnings. Be aware of the potential hidden costs that accompany home-ownership.

 

By researching the mortgage deals that are on offer; staying vigilant with your energy usage; avoiding impulse-buying and keeping organized with your spending; you have the potentiality to save plenty of money on your first move.

Even if you are a seasoned pro and looking for development finance for your fifth project, a lot of these good tips apply and can help you save money and get the best rates for all your utilities.