The previous article dealt with the subject of real estate financing abroad. Many a buyer who buys a holiday home abroad, has no other option in financing than to go in search of a financing partner on the spot. The banks in Germany often have no desire to get involved in such financing.
Normally it is not that difficult to find something abroad. Buyers receive a lot of support, for example from their real estate agents. Therefore, it usually does not take long before a loan agreement exists, which the buyer can allegedly sign without hesitation.
More risks than expected
Unfortunately, this is not always the case. Many buyers finance abroad on poor terms and sometimes take enormous risks without even being aware of it. One of the key issues is that they do not understand the loan contracts and therefore rely completely on the statements of others, such as brokers who provide financing assistance. But this is risky, because although these people are very friendly, their main concern is to do business.
Even if the contract is perfectly in order, there are risks that are not to be underestimated. In many countries, for example, interest rates on real estate loans are not fixed. Borrowers finance on variable terms, ie depending on the market development, interest rates may fall or even rise. But rising interest rates can make the rates considerably more expensive and thus a financial threat.
Examine loan agreements carefully
Given all these risks, potential borrowers should be extremely cautious. The key to success is getting multiple financing offers and taking a close look at them. Such an approach may be coupled to a huge effort and possibly also corresponding costs. Nevertheless, one should not shy away from these efforts, after all, in the end it comes to a lot of money.