Borrowing For The Purchase Of Real Estate Overseas

“Kathleen, I have been receiving your newsletter for a few months now and also have your 52-day course. Thank you for providing such great information.

“I suppose my situation is a little different than that of most of your readers. I own a small business, which is mostly web-based. I discovered a couple of years ago that I could run this business from anywhere in the world, only needing to be in my home area twice a year. I’m 32. My husband is 41, and we have a one-year-old. In many ways, I still feel like we are just starting out. I so desperately want to escape the stressful environment that is daily life here. My lifelong dream has been to live on the water, and I never thought it would be possible until I came across your site. A move like this would provide my family with a life that we’ve dreamed of. Now I just have to convince my husband. I simply cannot fathom why he doesn’t seem interested. I’ll have to work on him more!

“Here’s my question: Because we are younger, we do not have a lifetime’s worth of savings to use to purchase a home overseas. Do you have any information about financing a home overseas? Is that even possible? Panama and Belize are at the top of my list, but I’m not set on anything yet. Perhaps you’ve covered this, and I just missed it. I’m wondering if there is any option for us besides renting.

“Thank you so much for your information and for sharing your experiences!”

–Mel L., United States

A foreigner can get a local mortgage in most of Europe, but, in Latin America, it is much more difficult. Fortunately, you’ve targeted Belize and Panama, two countries in this part of the world where mortgages are available for foreigners (the other is Mexico).

In addition to bank financing, you should also explore seller financing, depending what you decide you want to buy. Typically, you’ll see this in a market where you’re buying from another foreigner–again a possibility in both Belize and Panama.

Remember, though, that renting gives you the chance to get to know a place better and to make sure both the destination as well as the neighborhood you’ve chosen are right for you. Not a bad option at all, even with a family.

One further note: Belize and Panama both make good sense for you for another reason, to do with taxes. You could set up an offshore corporation to house your business and have that corporation pay you an annual salary. This would allow you to avail of the Foreign Earned Income Exclusion, which would reduce your U.S. tax burden. You should work with an offshore tax attorney to set up this structure, but the money you could save in taxes should far outweigh the costs of the set-up.

Continue Reading: Real Estate Markets In Thailand And China

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