Released on: September 19, 2007, 11:42 am

Press Release Author: Jimwatson

Industry: Financial

Press Release Summary: Those looking to buy property abroad may consider many
different ways of doing it. One method might be by a lump sum raised by selling
another asset. Some may take a mortgage through a UK bank. But others may try
something altogether different - a foreign currency mortgage.

Press Release Body: Those looking to buy property abroad may consider many different
ways of doing it. One method might be by a lump sum raised by selling another asset.
Some may take a mortgage through a UK bank. But others may try something altogether
different - a foreign currency mortgage.

According to foreigncurrencymortgages.org.uk, the lower rate of interest in the
Eurozone (currently at a base rate of four per cent, compared with Britain\'s 5.75
per cent) may encourage Britons to go down this route. The view on this of
independent financial services firm Blevin Franks is that this is indeed possible,
but Britons need to be aware of the differences between British and European
mortgages, plus the potential problems of dealing between two currencies.

Matthew Weston, manager of overseas mortgages for the company, stated there were
several things to be aware of when applying for such mortgages. Firstly, he said,
countries such as France, Spain and Portugal operate \"stringent\" lending criteria
which strongly emphasise \"debt-to-income\" ratios, operating much more tightly than
British banks. Secondly, there was the fact that more financial information was
needed, meaning applications could take from four to seven weeks to complete.

Thirdly and of particular importance, Mr Weston explained, currency fluctuations
could throw payment plans into disarray, potentially making the mortgage more
expensive (though, naturally, the reverse could also be the case). He said: \"When it
comes to applying for the foreign mortgage itself, property investors need to be
aware of potential currency fluctuation risks. In relation to an overseas property
purchase, this simply means that the sterling cost of an overseas property changes
due to fluctuations in the rate of exchange between sterling and the currency in
which the price of the property has to be paid.\"

However, said Mr Weston, there were solutions to this problem. Stating that it was
\"essential\" a buyer speaks to an independent financial advisor before entering into
an overseas mortgage, he said an overseas currency specialist could remove much of
the risk, noting that: \"Currency specialists today offer the facility of locking
into an exchange rate for periods up to 12 months at a time.\"

\"This way they really know what exchange rate they are getting and can make the
necessary arrangements to transfer the right amount of funds to pay for their
mortgage each month,\" Mr Weston added.

Taking out a foreign currency mortgage is not easy and it\'s not altogether common,
but it can be done. In fact, it is even the case that one per cent of UK mortgages
are taken out in a foreign currency in order to take advantage of a lower interest
rate, whatprice.co.uk reports.

Dealing in foreign currency always has its ups and downs, as rates fluctuate and
property markets vary. Indeed, with banks like Nationwide suggesting that UK rates
have peaked it may be that the Eurozone advantage may not last. But most
importantly, those who do deal in money other than sterling when taking out a
mortgage need to be well prepared and advised.

Web Site: http://www.assetz.co.uk/

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