Second home

O

Oscarpuppy

Guest
Hi folks.
Maybe you can help me and or maybe not. I'm about 6 months away from making a purchase of a second home in the USA. I've about euro 100,000 in equity in my home here and savings of about euro 25,000, we've about 1800 a month coming in in extra cash that is never touched. Its a second home my wife is American and travels home for a large chunk of summer and holidays. ;) lucky me some would say. My question to all the financial guru's that be, is whats my best way of financing about euro 180000 from the above. Any help would be appreciated.

Okaly
 
As a general principle, it is best to borrow in the currency in which you are going to hold your assets.

Let's say you borrow in € and buy a house in $. You then run a currency risk. If the $ depreciates against the €, you will lose money. But if your borrowings are in $, then the value of the property and the € amount of the loan will decline equally.

Presumably, it's reasonably easy to get a US mortgage of around 90% of the value of the property. But if it's not, then you should get as big a US mortgage as you would be allowed, and release some equity in your home for the balance.

Brendan
 
Thanks Brendan
I'll check to see what we can get from the U.S. I know they hit you with an interest penalty for being a foreign buyer and you also need a large deposit possibly 50% of down payment. Wow down payment I almost am sounding american.
Anyway thanks I'll check that direction out.
 
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