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International Real Estate

Since mortgages generally aren’t available to U.S. buyers overseas – and most U.S. banks won’t lend for purchases abroad – what are some alternatives if you want to buy a home in a foreign country? Here are a couple of ways to finance your foreign real estate purchase.

They say cash is king, and this can certainly be true when it comes to buying property abroad. Not only will you be able to close the deal faster, but you will also likely get the best price, through discounts or upgrades – or both.

In general, paying cash is recommended only if the property in question is already built – and not in the pre-construction stage. If you pay cash upfront for something that’s not built yet, there is always the risk that the developer could run out of money or have some other problem that would either delay or prevent project completion. In these situations, it could be tough, or at least time consuming, to get your money back. 

Cash

Depending on the country, you may qualify for developer financing if you purchase a lot, home site or pre-construction property in a development. Developer financing typically involves little paperwork, and there are no age restrictions or life insurance requirements. Another perk is that sometimes developer financing is interest-free.

With one type of developer financing, you make payments on fixed dates, such as 10% when you sign the purchase agreement, 10% after six months, another 10% after 12 months, and the balance when the project is complete. Rather than fixed dates, another arrangement has you make payments according to construction stages, such a paying 10% down, 20% when the foundation is complete, 20% after the first floor is complete, etc. With another type of developer financing, you make regular payments each month. If you purchase a $50,000 lot in Costa Rica, for example, you might pay something like $1,200 each month for four years, depending on the interest rate, if applicable.

Developer Financing