So you’ve always dreamed of a buying that retirement home in Mexico or in Asia but you don’t know what your financing options are? Well look no further here is a list of options on purchasing your piece of your retirement dream if you live in the United States. This list covers how to finance the purchase of properties abroad.
Cash is king when it comes time to purchasing property anywhere. If you have enough of a savings tap into your savings. You would not need to go through credit score checks and that long process of financing.
#2: Home Equity Loans
You can tap into the equity that you have built over the years in your home. As long as you have equity the bank is willing to offer these loans. Banks will not ask you what you will be using the money for. It is important to keep in mind, you need to keep on top of paying the loan.
#3: Loan from a 401(K)
Taking a loan from your 401(K) is an option. The IRS limits the amount of a 401(K) loan to $50,000 or 50 percent of your vested account balance, whichever is lower. You basically pay back the loan to yourself and the interest goes back to your account.
#4: Self Directed IRA
If you go with the custodian managed option, be sure to select a custodian that will agree to make the purchase for you. A self directed account means you can “direct” the custodian or request he make certain investments. While establishing a self-directed IRA, make sure that the service provider offers features like checkbook control, which allows you to make an investment at your own discretion. Further, there should not be a restriction on non-traditional investments, so check the available investment options up front.
Have you purchased real estate abroad and how did you go about financing your purchase? Please add your comments below.