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Finance - Propertiesabroad.com and Harlequin Property


100% Finance

Purchasing off-plan means you pay a lower price for your property than it will be at completion.

There will be several price rises during the development period which means you will see the price of your property increase over time. You can sell your property at any time after exchange of contracts*.

How to finance your investment property:

  • £1000 ($2000) non-refundable reservation fee* required for reservation of a specific property – you must pay the 30% deposit within 45 days of making your reservation.
  • 30% deposit (i.e. 30% of the purchase price) less the reservation fee
  • Harlequin Property will assist investors to obtain finance for completion.

When choosing the 100% finance option, all you pay is a £1,000 reservation fee** – nothing else to pay developer until completion because Harlequin Property pays your monthly interest payment on the 30% deposit

*All options for finance available must be explored, (i.e. unsecured, secured, mortgage or re-mortgage). If finance is available, from whatever means as previously mentioned, and you refuse this for whatever reason, or decide not to proceed, the reservation fee is non-refundable. If you apply for finance and are unsuccessful, Harlequin Property then reserve the right to try and obtain finance through its own contacts. In all instances, if Harlequin Property is unable to obtain finance the reservation fee will be refundable.

**Subject to status. Terms & conditions apply

100% Finance Example

If you raise a loan to fund the 30% for your deposit, the developer will make the interest payments for this amount on your behalf. See the example below:

30% deposit required (less 1000 ($2000) reservation fee) within 45 days of reservation. Should you choose to borrow the 30% deposit, the developer will pay the interest on the loan, for the 30% deposit until completion of the specific unit you have reserved. These payments will then be added to the purchase price upon completion.

Example (Sterling): Property price 200,000. 1000 reservation fee paid. The deposit = 200,000 x 30% = 60,000 - 1000 (reservation fee) = 59,000. Interest on 59,000 @ 6% p.a. = 295 per month, paid for 24 months by the developer = 7,080 added to the purchase price upon completion.

Example (US Dollar): Property price $370,000. $2000 reservation fee paid. The deposit = $370,000 x 30% = $111,000 - $2000 (reservation fee) = $109,000. Interest on $109,000 @ 6% p.a. = $545 per month, paid for 24 months by the developer = $13,080 added to the purchase price upon completion.

Due to the significantly discounted off-plan contract price and the capital appreciation during the construction phase, it is anticipated that the 200,000 ($370,000) purchase price will have grown to a property value at completion of circa 325,000 ($601,250)

At this point a 70% loan to value developer loan will be required and therefore you will be able to borrow up to 227,500 ($420,875). This is clearly ample to pay for the 199,000 ($368,000) (purchase price less 1000 ($2000) reservation fee) that you owe as well as the accrued interest of 7,080 ($13,080) - from the above example.

Assuming you borrowed the maximum loan to value mortgage, available from the example above, you would borrow 227,500 ($420,875) on which the annual interest payment would be 18,200 ($33,670) based on a rate of 8%. The rental guarantee of 10% of your purchase price of 200,000 ($370,000) will generate you an income of 20,000 ($37,000) each year, should cover your mortgage payments. If you wish, you could retain the 59,000 ($109,150) loan you took out for the deposit, pay the interest yourself each month, from completion onwards, and use the money to invest in a further investment property purchase.

*Subject to status. Terms & conditions apply.

100% Finance

Harlequin Properties can be purchased with a SIPP.

A Self Invested Personal Pension, known as a SIPP, is a personal pension for which the person investing for retirement decides what their pension fund is invested in. Traditionally pensions are managed by a pension fund manager who may invest in volatile stocks and shares or boring old cash and the investor has no control or influence on this decision.

This is a complex area and it does need professional advice. Harlequin Property have teamed up with one of the UKs leading independent wealth management companies which specialises in pensions and investments. They will carry out an initial review completely free of charge for potential investors to assess whether their existing pension plans may be transferred into a SIPP.

For further details of how to invest in a Harlequin property using a SIPP and the fees associated with this please contact us on 0208 920 5260 and we will be happy to introduce you to an independent pension specialist.

There may be an initial set up fee and ongoing annual charges associated with the management of the SIPP. Harlequin Property does not provide advice on SIPPs. We will introduce all interested clients to an authorised FSA firm for this purpose.

Harlequin Property is not regulated by the Financial Services Authority. Harlequin Property does not offer financial advice.

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