But if a client intends to finance the purchase with a mortgage, it’s actually more important for them to establish how much they can borrow before they do anything else.
An 'Approval in Principle', will do just that – it will tell them exactly how much they can afford and what price range they can realistically consider when conducting their property search.
Sales have often fallen through due to potential buyers failing to secure the funds they simply presumed would be available to them. It’s no surprise, therefore, that any seller or agent, given a choice, will prefer a purchaser who can demonstrate that they have their finance in place, rather than somebody who has yet to consider how to fund their purchase. Buyers with an AIP could also be better placed to negotiate price.
Generally speaking, it can be obtained pretty quickly, and once your client has it, they can start looking for a property safe in the knowledge that based on their personal circumstances and disclosure (and subject to the usual small print), they’ll be able to secure the required finance to buy it. It’s tangible evidence that they can take along when house hunting and it can also lead to their application being fast tracked once they’ve chosen their home. What’s more, it costs nothing.
Arranging the financial side of things upfront also gives them more time to research the mortgage market, so that they (with your help) can find the best possible deals and decide on things like whether a euro or sterling mortgage will be most suitable.
It’s also really important to take into account the associated costs of buying a property abroad. Clients should usually add on between 10 to 15 per cent of the asking price to cover things like taxes, insurance, fees and other costs.
It’s a great time to buy, but it pays to do things properly.
