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Expat remortgages - can I remortgage if I live abroad?

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Expat remortgages

If you are an expat living abroad who owns a property in the United Kingdom, then this article is for you. If your property has a mortgage, it’s likely that at some point you’ll need to remortgage to avoid going onto the lender’s high interest standard variable rate. You might also have other plans in mind that require remortgaging to release equity in the home. Perhaps you are considering buying a property to live in whilst abroad or want to purchase another property as an investment. If you have recently moved abroad, you may also be considering converting your current residential mortgage to a buy to let. Whatever your plans, if you no longer reside permanently in the UK, you’ll likely need an expat remortgage

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How difficult is it to remortgage a British property if living abroad?

The expat remortgage process tends to be more challenging in comparison to a standard remortgage. There are several reasons for this: 

  • Some lenders have restrictions based on where you live. They don’t offer remortgages to expats who live in certain countries, such as countries in Africa, Asia, and Australia. 
  • How you get paid can also be a factor. It can be more complicated to get a mortgage if your employer pays you in a foreign currency and your income will require conversion to UK sterling. Lenders may also want to see that your income is paid into a UK bank account. 
  • You may need to arrange for the translation of your paperwork into English for review. This may cause delays in the mortgage process meaning it could take longer to secure a mortgage offer. 
  • It’s also important to understand your tax status both in your host country and in the UK as this could also have an impact on your application. 

 

Whilst it can be a more complicated process to apply for an expat remortgage, it’s often easier compared to applying for an expat mortgage. If you are remortgaging, you will have a track record of your current mortgage payment history which the lender can review. Having this credit history will support your application and show to the lender that you have experience of managing the mortgage and can continue to do so. 

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What are the lending criteria for expat remortgages?

The eligibility criteria for expat remortgages will vary from lender to lender, but there are some general checks that lenders will conduct as part of their review.  

  • What are your plans for the remortgage? Are your remortgaging the current loan to avoid higher rates or are you raising more money, and if so why. 
  • What is your employment status? – Employed, self-employed, contractor etc. If employed, who do you work for? An international corporation or a small family business. The lender will also look at how established you are in your role. 
  • How much do you earn and what currency are you paid in? The lender will need to convert your income into UK sterling based on the current exchange rate and may apply a currency risk reduction. They may also carry out further calculations to confirm your income. You’ll need to supply several months’ payslips and bank statements or if self-employed, accounts for the last 2-3 years. 
  • Where do you live? The lender will want to verify that you live where you say you do. As stated above, lenders may have restrictions as to the countries expats can live in. 
  • How much equity do you have in your property? You may need to have a minimum amount of equity in the property. Lenders may also cap how much additional funds will lend to you if you are raising capital. 
  • Do you intend to repay some of the capital to reduce your loan to value? – The lender may have restrictions as to where the funds can come from.  

This list is not exhaustive and the experienced mortgage team at Simple Fast Mortgage can match your situation to the individual lending criteria to ensure there are no nasty surprises later. 

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Which lenders offer remortgages to expats?

When it comes to remortgages for expats, providers tend to fall broadly into two categories: – traditional high-street lenders and specialist mortgage lenders. Which will be the right fit for you will depend on your individual circumstances and plans. Traditional high-street lenders tend to be more generalist in their criteria so whilst rates may be less expensive, their criteria can be more rigid. In comparison, specialist lenders tend to offer more flexible criteria and have more extensive knowledge of expat mortgages. Our friendly mortgage team has fantastic connections in the mortgage market and can help you find the lender that’s right for your needs

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Are the interest rates on expat remortgages more expensive?

Interest rates for expat remortgages are more expensive than those available on standard remortgages. Lenders perceive expats as a higher risk, because you are not living in the UK or in the subject property. This can therefore make it more difficult for them to get their money back if you default on payment. Understandably, this higher risk leads to the interest rates on offer appearing more expensive. 
 
Despite this, it’s often still possible to get a competitive deal. By reducing the loan to value of the mortgage, you can usually access cheaper rates so if you can repay some of the capital you may be able to save money. Some building societies also offer more competitive interest rates to expats than other high street lenders. 

Why choose Simple Fast Mortgage for your expat remortgage?

Expat remortgages are a very specialist type of mortgage finance which can be more complex to apply for compared to other types of finance. That’s why it’s worth working with a specialist mortgage broker who has experience of working in the sector, to secure your mortgage. Our friendly team has worked with many expats like you over the years to secure the mortgage finance that they needed. We are confident that we can help find the mortgage that is the right fit for your personal circumstances without the stress or anxiety of the unknown. The team will offer advice on gathering the paperwork you need, and we’ll liaise directly with the lender and your solicitor, on your behalf. So, there’s no need to worry about reaching the lender during their limited opening hours when you are in a completely different time zone. Start your expat remortgage application today by reaching out to our helpful team. 

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