Financing Your Property in Greece
(excerpt taken from the Greece Buying Guide)

When you find the property that you want, a deposit will be required. The amount can vary, but is usually around 10%. Incidentally, you’ll want to make sure the fee is refundable in case you cannot get a mortgage or you have to pull out of the purchase for some reason.

I cannot stress this point enough – every week I get emails from people who put money down not realising that, under certain circumstances, deposits are not refundable…

Some buyers use their debit or credit card to pay the deposit as this is convenient and means that they do not have to carry large amounts of cash around with them. However, it is an expensive way of paying it because of the add-on charges and the poor exchange rate given by the bank or credit card companies.

One way of overcoming the add-on fees and poor exchange rates is to open an account with a currency company prior to your trip and to lodge a small amount of sterling with them – enough to cover your deposit.

If and when you choose to put down a deposit, the money can be transferred to Greece very quickly. And if you decide not to place a deposit, the currency company can move the money back into your UK account.

I recommend Smart Currency Exchange for currency exchange and transfer services. It’s UK’s only exchange company that focuses exclusively on helping overseas property buyers save money and avoid currency fluctuation risks. And since the company is specifically niched in money transfers for property, the entire process is efficient, easy and very cost effective. Contact Smart Currency Exchange on 0808 163 0102 (free phone) or check out the website at http://www.smartcurrencyexchange.com

Before you decide on a property, make sure that you have already secured a provisional mortgage offer. This means you know exactly what you can spend. Your IFA or mortgage broker can help you to decide on the best type of mortgage for you. If you need help with this please: click here.

How about the balance that remains to be paid after your deposit? I am going to discuss the following options:

a. Paying Cash

If you have the cash available then the whole payment process is quite straight forward. All you need to do is to make sure the funds are paid at the correct time(s); keep in mind that off-plan purchases require staged payments that are dependent on specific goals being achieved in the build programme.

For example, you’ll pay 30% on completion of the foundations, 30% on completion of the roof and soforth. Also, it’s imperative that you get the best exchange rates possible by using the services of a currency company.

Also note that local currency, in the case of Greece the Euro, can be reserved at today’s rate for purchase in the future. This is a very simple way to ensure that you don’t suffer from adverse currency movements. I have heard horror stories where the cost of a property has increased by 20% in sterling terms from the original budget. Even if you think you have the cash available, a 20% increase may change this. Your dreams could lie in ruins…

Even if you have the cash available you should not overlook the possible advantages of taking out a mortgage. I am not a great fan of debt: nobody ever teaches you the compound effect of debt interest payments, but used properly debt can help you match assets and liabilities and/or give you certain tax advantages. Take proper advice on all of this from a recognised mortgage broker or IFA (If you assistance with this please: click here). This is key. Also remember that if your purchase is dependent on the sale of a property, make sure that all contracts, including the reservation fee contract, have made this a condition of purchase.

And what about mortgages? If your purchase is dependent on a mortgage, make sure that your lawyer and the vendor you are buying from are aware of this. All contracts should be made conditional on obtaining the mortgage, which means that if for any reason you don’t get the mortgage you won’t be forced to buy the property or sacrifice your deposit.

Banks are usually reluctant to offer you a mortgage in principal prior to finding a property, but a good bank or broker will usually be able to indicate an approximate level of borrowing subject to satisfactory checks. This will allow you to know how much you can spend.

You would probably consider two sources of mortgages:

Expert advice is required whenever taking out a mortgage: make sure you get it from a recognised mortgage broker or bank.

If you need help finding a broker that can help you mortage or re-mortgage your UK home OR help you to get a mortgage in Greece, please fill out our mortgage form.

Sometimes buyers take out a loan to bridge a timing difference, for example they have seen that prices are rising and want to secure a dream property now. However it will be a couple of years before they buy. The buyers take out a mortgage which will be repaid on the sale of their UK property. Make sure that any mortgage you take out has no penalties for early repayments.