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My partner and I are looking to purchase a flat together in the very near term and have a question we were hoping someone might be able to shed some light on before we approach the bank with our plans.

Our current situation is slightly more complicated than usual as where we are planning to buy in Lithuania (my partner's home country), and I am not a resident/EU national or have any type of living/working visa arrangements there. I should also mention that it's perfectly fine for a foreigner to purchase property in Lithuania.

Our plan is:

  • I am paying half the purchase of the property with my own savings.
  • She is paying for half of the purchase with 50% savings and 50% mortgage (she has been pre-approved for the amount she needs to borrow)
  • Property title in both names etc

My question is are banks open to this type of arrangement? Would they they still lend her the money she needs being that she being that she is only a 50% owner with the other half in a foreigner's name?

We really want to avoid having to transfer my savings into her account or anything like that to purchase the property as she would have to pay tax on it.

She could also take the whole purchase amount on a mortgage, though we don't want to have to repay that amount of interest over 30 years, our current arrangement we can very comfortably pay her small mortgage of in 10 years.

I should also state that we are probably looking to rent the property, taking the small loan size into consideration the property would be positively geared.

I wanted to ask here first before we approach the bank so we don't look like complete mugs going into an appointment.

  • You need to see if rental property mortgages are treated differently than ones for primary residencies (where you live at the property). At least in the US, they attract higher interest and insurance rates. – mkennedy Aug 20 '17 at 19:17
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I guess most banks will not have an issue with that arrangement. The bank take collateral in the house for the amount your girlfriend needs to borrow, from her part of the house. Most likely the bank will accept the house' value as what you pay for it, assuming you pay fair market value - otherwise they will contact a valuation company to put a value of your new house. If they feel that her share of the house (50%) can cover her loan, they will definitely agree with the deal.

You being a foreigner will, probably, have little to say in the matter, as long as you do not need to borrow money for your share of the house.

  • Thanks for your answer. All should be fine then as i don't need to borrow money and the value of the loan is less than 50% of the house value. – user3796133 Aug 23 '17 at 15:18
  • But surely only the bank can give you a definitive answer. – ssn Aug 23 '17 at 15:31

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