Foreign property as collateral??

maxxtssy · Joined: 01 Jul 2006 Posts: 3

Hey all,
I am a newbie to this forum and am impressed by the extensive knowledge imparted. I am hoping for some answers from you all knowledgeable members.
I am to be a first time home buyer in US. The loan is going to be in my name. Gross income for the me and wife together is about $120,000 with monthly car payment of $250, revolving monthly expenses of about $1800.
We have no debt. My credit score is 718's and my wife's is 740"s.
I intend to buy a 260,000 house, with 0-5% down. My main question is as follows:
I have some immovable property in other country totalling about $300,000 and I do not intend to sell it. CAN I use that property as a collateral to buy property here and get better rate and no PMI?.
Or does anybody have any good suggestions. I do not wish to use my savings as dowm payment towards the house.
thanks in anticipation.

chow · Posted: Sat Jul 01, 2006 9:12 am Post subject:

It all depends on what country the property is in, and what kind of property it is. Those loans aren't cheap. Few lenders do them. You may be better served by getting a loan off that property for cash-in that country and then investing the cash from that loan-in the property here. (where ever "here" is at, this is a virtural world we are in now!)

The other big factor is the exchange rate on that money. The dollar is predicted to get weaker over the course of the next few quarters if not longer. That will make several countries goods being imported here-more expensive for us to buy. However, that could be a good thing for you. If you got your money there-then brought it here-you made "money" just by exchanging it if you buy land here. Make sense?

maxxtssy · Joined: 01 Jul 2006 Posts: 3

Thanks chow...never thought about ...total sense..great advice
thanks a ton.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

You can do a combo loan (80% 1st 15% 2nd 5% down) and get out of the PMI pretty easily, and not have to pay any points on that. The rate generally would very likely even be the same. Then you could keep the money there. Keep in mind that if the dollar goes down in relation to wherever that property is, it becomes even better of an investment if you keep it there and don't exchange it right away.

Either way, your loan would be a piece of cake with those scores, that income, and a small down payment.

maxxtssy · Joined: 01 Jul 2006 Posts: 3

Thankyou haplo...excellent suggestion..I am beginning to understand the equations..much appreciated.