More and more Poles are wondering whether it is worth buying real estate abroad. This fact should not be surprising. Private investors are attracted by stable foreign markets, good price conditions in relation to the projected financial benefits, as well as the feeling of security of owning a property outside our country. See what are the ways to finance the purchase of real estate abroad.
What is a mortgage loan?
The definition of a mortgage loan is actually quite simple and comes down to a bank granting a loan for the purchase of real estate and securing its interests thereon, thus repaying the liabilities by the creditor.
For banks, a mortgage loan, with some exceptions, is actually one of the few services with such a high degree of security, because a creditor or debtor who stops repaying ceases to be the owner of the property. It is then taken over by the bank granting the mortgage loan. The freedom to dispose of an apartment, house or other facility means that the bank can easily sell it to recover the funds lost as a result of the transaction. For people who want to live on their own, a mortgage loan is the basic form of purchasing real estate from the secondary and primary markets in a given country, and basically the only one.
We are more and more willing to buy foreign real estate for both housing and investment purposes. However, in the case of financing the purchase of real estate abroad, investors have severely limited options, which result mainly from the inability to value real estate abroad and problems related to enforcement in the event of a break in repayment. Fortunately, we still have a few options.
Is it profitable from a financial point of view? As it turns out, it depends on many variables.
Financing the purchase of real estate abroad – banks in Poland
Banks in Poland generally do not decide to finance the purchase of real estate abroad, even despite the seemingly perfect security and the basically certainty of recovering funds in the event of the creditor’s insolvency. However, this is not a practical solution, because in order to grant a mortgage loan, banks usually expect:
- Easy availability – Polish banks rarely have branches abroad, and if they do, they will not grant a loan for the purchase of real estate in a potentially serviced country abroad. Why? This is mainly due to the problems related to the formalities of purchasing a given apartment or house, as well as the cumbersome valuation, which is rarely possible “remotely”. As a result, the bank appraiser will not be able to assess the validity of the transaction and the agreed purchase price in relation to the real value of the property abroad. This logistical problem means that rarely any bank in our country decides to transfer cash to the seller.
- No risk related to debt enforcement – banks do not like to take risks, which results primarily from very large investments. It is worth knowing that the procedure for recovering the debt from the creditor would therefore be very difficult and, ultimately, virtually impossible. A bank granting a mortgage loan must have collateral in the form of real estate – the inability to cash it in means that the bank basically has no way of recovering the invested funds.
The only option is a mortgage loan. What does purchasing real estate with a mortgage loan involve? On obtaining enough cash to finance the purchase of a given house or apartment, if the bank is able to secure the property in our country. Therefore, this is a solution only for owners of real estate whose value is similar to the property being purchased. However, the value may be higher – then the financing conditions may be better or lower – but then the price conditions usually deteriorate significantly.
Loan for real estate abroad – foreign banks
Foreign banks are more willing to grant loans than those based in Poland, but the path to obtaining it will still not be as simple. In the case of financing the purchase of real estate located in Croatia, i.e. within the EU, the number of conditions to be met is not very long. First of all, if they want to get a loan from a foreign bank, they will have to prove that they can repay it. Financing the purchase of real estate abroad always comes down to proving earnings and assessing the projected future of a given profession. The bank will also assess, similarly to Poland, the price and real value of the house or apartment, and will also ask for a lot of personal data. Nationality, contrary to appearances, does not have to be very important, but this issue may vary depending on the regulations of a given bank.
Cash loan – is it a good solution?
How to get a loan for an apartment abroad? A good solution may be a cash loan with a value equivalent to a mortgage loan, because loans for any purpose are, as the name suggests, intended to be used by the borrower in any way. This is usually the only loan for a property abroad, which has the advantage of being easy to obtain and the disadvantage of being a short repayment period, which means higher running costs.
Croatia – an ideal place to invest financial resources
Croatia is an extremely attractive destination not only for tourists, but also for investors. There is nothing surprising in this, because this country delights with its beautiful landscape, azure coast, golden and extensive beaches, wonderful vegetation and majestic mountains. Most Croatian cities are bustling with life, especially during the holiday season, and sunny weather and picturesque surroundings with wonderful architecture allow you to spend your free time perfectly and escape from reality. This is why it is a perfect place to invest your financial resources.
A holiday in Croatia is basically a recipe for a successful holiday. Enjoying the charms of this country will allow you to recharge your batteries and return to Poland fully rested and relaxed. In fact, it is enough to visit the fairy-tale land of Croatia at least once, going to the most popular cities or visiting charming islands, to want to return there as soon as possible. Croatia is addictive in the positive sense of the word, which is why more and more people are considering moving there permanently or dreaming of being able to return to their own apartment or villa at any time, without having to look for accommodation in various facilities.
If you also belong to the group of people who love Croatia and want to live there or have their own place at their disposal, visit it from time to time or derive financial benefits from renting a property, it is definitely worth considering buying real estate. If you do not have enough money, it is always worth considering financing the purchase of real estate abroad.
Your own apartment or house in Croatia is a solution that combines many advantages. First of all, it will allow you to return to it at any time of the year, regardless of whether there is a free room in a given hotel facility. So you won’t have any restrictions that can spoil your plans. Such a break from everyday life in sunny Croatia is the opportunity to take a breath in the beautiful surroundings, away from tedious duties. In such a situation, if you plan to visit your place only from time to time, it is always worth considering the option of renting it and treating it as an accommodation base for tourists. This way, the invested funds will pay off much faster and the property can be used all year round.
What property is worth buying in Croatia?
Are you wondering what property to buy in Croatia? You certainly won’t find a clear answer to this question, because everything really depends on your individual preferences. Some people value peace and quiet, so their goal will be to purchase an intimate investment away from the hustle and bustle of the city. However, lovers of night life, lots of entertainment and activities, who like to live in the center, will certainly derive much more joy from an apartment located in a larger Croatian city.
For this reason, when purchasing real estate in Croatia, it is worth taking into account individual preferences as to conditions. Therefore, factors such as:
- square footage of the property,
- number of rooms,
- standard of finishing, including the quality of equipment and the general condition of the property,
- additional attractions – spacious garden, sauna, private swimming pool,
- nearby transport,
- the sides of the world the windows face.
What should you pay special attention to when financing real estate in Croatia?
After finding an interesting real estate offer in Croatia, it is worth checking its land and mortgage register, which contains a lot of valuable information. Important factors include the size of the plot, its purpose, owners’ details and any mortgage charges, if any. It is also worth talking to your closest neighbors who know the area very well and perhaps we will learn first-hand from them something that will be important to us.
Individuals who plan to purchase real estate in Croatia should also obtain an OIB (Osobni Identifikacij Broj) number. It is given to all people who want to carry out specific transactions in the Dalmatian region. Once we complete the formalities regarding the mentioned number, you can proceed to signing the real estate sales contract, which should be prepared by professionals in this industry. Interestingly, for several years now, European Union residents have been able to purchase real estate in Dalmatia on the same terms as Croatian citizens.
Where to look for real estate in Croatia?
Croatia is quite far from Poland, so when looking for and buying real estate in the Balkans, it is worth using the help of specialists. For this reason, we encourage you to cooperate with our company NESTOVIA, which eliminates any risk of a failed investment and will also save you time and money. We are a real estate agency intermediating the sale of houses, villas, plots, flats and apartments located in Croatia, and our team consists of specialists in the Croatian real estate market who are passionate about this region and are happy to help clients’ dreams come true.
1. How to get a loan for an apartment abroad?
How to finance the purchase of real estate abroad? You can choose a mortgage loan, a regular mortgage loan at the place of purchase of the property, or a cash loan for any purpose from a Polish bank.
2. Loan for a property abroad – can nationality be a problem?
No – nationality does not matter for most foreign banks. All you need to do is prove your earnings and present your financial expectations.
3. Is it worth investing in an apartment abroad?
Is it worth investing in an apartment abroad?
Definitely yes! All you need to do is use the loan for a property abroad and buy your dream home.
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