The number of UK citizens seeking to buy property overseas continues to increase as a result of a variety of factors, including the expansion of globalization, the growth of the European Union, wider travel experiences, cheaper travel options, better investment opportunities than at home or the simple desire for a perceived better quality of life.

Not surprisingly, brokers based in the UK are increasingly looking at the possibilities of tapping into this escalating market, as such involvement outside of traditional home based business activity is a potentially lucrative income stream, and an additional attractive offering to prospective clients.

However, this is not a decision to be taken lightly, as venturing into the overseas mortgage market can be fraught with difficulties if caution is not taken. Each country presents a myriad of national and local laws, customs and language barriers, that may put off all but the brave.

The overseas mortgage market is completely different from the UK market and the differences need to be recognized and understood if a broker is to provide a good level of service for their client. Managing client expectations regarding the mortgage process is key. For example, when a client signs up for a mortgage on an overseas property, they may expect the process to be similar to that in the UK. Not so. Whilst the front-end administration may be similar i.e. sign a mortgage application form and submit I.D and proof of income etc. This is only the start of what can be a long and complicated process if it is not managed properly, and for that to happen it is vital brokers truly understand the lender administration requirements for each country.

Clients will be looking to brokers for help and advice regarding all the paperwork and additional requirements when taking out an overseas mortgage, which is no surprise as this is completely alien to most. Therefore brokers need to be prepared to spend more time guiding their clients through the overseas mortgage process and this will involve being drawn into more areas such as whether a foreign currency mortgage is most suitable for the client, which may depend on the intended use of the property i.e. investment or second home.

Taking Calabria as an example of how the mortgage process operates; on the plus side, the lender will not allow completion without having all the registration documents in place, which is ultimately good news for the client as this does provide a level of protection. However, this can be a lengthy process and client expectations must be managed to ensure this is understood.

There are various options as to the level of activity in the overseas market that brokers may wish to undertake. The conclusion reached may be not to engage at any level due to the inherent complexities involved. In such cases it may be more prudent to simply direct the client towards a third party specializing in this market.

However, it may be possible to segment the market and cherry-pick, offering loan arrangements in selected countries, such as those with more mature markets and established track records in providing loans for UK nationals, e.g. France, Spain and Italy. For those clients with more adventurous tastes, with destinations in mind outside the norm, the expertise and experience of a third party broker specializing may be the best option, as the mortgage process in ‘emerging market’ areas may be unproven, and a minefield for brokers not conversant in dealing with overseas lenders on a regular basis.

Apart from financial considerations, there are various legal and tax requirements which do vary from country to country. Brokers should be prepared to refer clients to tax specialists for specific advice and guidance.

Therefore, brokers wishing to supply their clients with the best possible advice on overseas property purchases have various options as to their level of involvement. As the UK has a long-established, competitive secured loan market, brokers may decide that the overseas market will present a lucrative and interesting challenge. Others may be of the opinion that creating mutually beneficial partnerships with a third party, specializing in overseas mortgages is the best option. Whatever the choice, the interest in this market is now such that there is a plethora of reliable and professional information available with which to make educated and sound decisions on behalf of clients.

Ultimately, the key is to provide property buyers with sound advice and guidance throughout the mortgage process. Whether people are buying purely for investment or are ploughing their hard earned life savings into owning a place in the sun, they deserve the best possible service, advice and protection from the intricacies of each country’s individual property laws and requirements. After all, in many cases, people only get one chance of buying their dream overseas home.