As I see it, the way to finance a purchase in Morocco is, in principal, no different to one here or anywhere else in the world. The options are a) get a mortgage or b) purchase it outright with funds raised here.
What are the pros and cons of either option? Why should I go through all the hoops to get a Moroccan mortgage? What are the benefits?
I suspect getting a Moroccan mortgage will be hassle both during and after the application. Easier I think to keep one in the UK and offset the interest against the income.
Other concerns I would have would be not knowing the Moroccan mortgage rules, and I assure you a Lawyer is not usually the best person to point out the implications of financial contracts. For example will a 'rule of 78 redemption clause' apply where you have to pay ALL the interest that would have been due on the entire term even if you paid the capital off early.
to the best of my knowledge, you can't get a UK mortgae for a Moroccan property. What I was thinking of doing was using savings and increasing my current mortgage to cover the balance. But does that affect repatriation of rental income and ultimately sale proceeds?
Originally posted by cov flyer: As I see it, the way to finance a purchase in Morocco is, in principal, no different to one here or anywhere else in the world. The options are a) get a mortgage or b) purchase it outright with funds raised here.
What are the pros and cons of either option? Why should I go through all the hoops to get a Moroccan mortgage? What are the benefits?
This is all doing my head in!!!!!!!!!!
Mortgages are still in their infancy in Morocco so there is not the range of flexible offers. They are in Euros so you may want to consider currency fluctuations if you are paying in sterling. The property that you apply for a mortgage on must have the Titre Foncier. If you are buying off plan, you will have to check that you can get this titre before you have to stump up the readies...be careful contractually as a titre can take more than a year to come through. I don;t see ANY benefit in taking a moroccan mortgage if you can raise one here at home. But if you do want to do that, you will need to provide proof of earnings etc to the local bank you decide to take the mortgage out with.
As I said, the hoops you have to go through, plus the costs involved made me ask the question. I'm still not sure whether repatriation of funds will be adversely affected.
Originally posted by cov flyer: As I said, the hoops you have to go through, plus the costs involved made me ask the question. I'm still not sure whether repatriation of funds will be adversely affected.
The moroccan bank you select can advise you of any repatriation issues. I didn't get that far with the discussion so I wouldn't know
I was over in Yangier earlier this year to look at a mortgage. There interest rates are around 5% and do not vary much. There aer complications and I have to go back. We were told that we have to set up a bank account with a direct debit in place six months prior to requirement. You have to be seen paying/saving before hand. They contact your employer and have money stopped direct at source. Still looking into this. I am married to a moroccam so things are a bit easier. Our first purchase was cash, but the next needs finance. Having a grasp of the language has helped.
Personally I would recommend to get a mortgage in emerging markets.
Why?
1. More security in the deal. ie. If a bank is funding it, they do there own due diligence, so you have more protection. 2. Less risk for you as you put down less of your capital. 3. Leverage, normally your investment in an emerging market is going to exceed the price you borrow at. ie. Interest rates in Morocco, 7.5%, and your property is going up 15% a year, you are making 7.5% on someone elses money, if your money is in the uk, making you 5% a year, you are only 2.5% down, and you have a much safer investment.
So in my opinion USE OTHER PEOPLES MONEY. That is what many rich people do.
