Approval in Principle

3 April 2009

Despite the current economic situation in the UK, the appetite for property abroad remains strong from people who are retiring, emigrating or investing in the overseas property market.

However, it’s no longer a simple case of ‘location, location, location’ when buying property abroad, but now a case of ‘affordability, affordability, affordability’.

Finding your dream home overseas can be relatively easy, but securing a mortgage is no longer such a given. It’s vital that you determine how much you can afford before embarking on the purchase process. An 'Approval in Principle' (AIP) will do just that – it will tell you exactly how much you can borrow.

An AIP could also put you in a much better position with agents and developers, and will let you know what Loan to Value (LTV) is obtainable on a mortgage, which would determine the cash deposit required.

Prospective overseas homebuyers can generally apply for an AIP certificate online free of charge, and get a response within 24 hours. This means that you can start looking for a property safe in the knowledge that, based on your personal circumstances and disclosure, you’ll be able to secure the required finance to buy it.

Michael Axelrod, commercial director at Conti mortgages contributed this piece exclusively for Homes Overseas. For further information log-on at www.mortgagesoverseas.com.