For most people, remortgaging is a fairly straightforward affair that simply entails comparing the different offers in the marketplace and choosing the one that offers the best combination of low interest rates and agreeable terms and conditions. For UK citizens living abroad, however, remortgaging a property back home is fraught with hurdles. Almost all major lenders impose significant restrictions and requirements on remortgage applications from UK expats, and some lenders will refuse such applications outright. Furthermore, this process is further complicated by residency requirements and renting restrictions that affect expats more than other UK citizens. This article, fortunately, will look at what expats need to consider when remortgaging a property in order to find the best remortgage deals for them.
Remortgaging Restriction for Expats
The first thing to note is that although there is no such thing as an expat mortgage per se, it is necessary for expats to find a mortgage that is specifically geared towards their needs. Many mortgages come with restrictions that expats may inadvertently break by living abroad, which could lead to a lender demanding its money back before the end of the mortgage term. For example, many mortgages require the borrower to reside within the purchased property for a certain number of months out of the year, and those who fail to do so risk repercussions from their lender. Additionally, most mortgages will not allow properties to be let out to tenants if the homeowner is away, and doing so could again incur significant penalties. Also, as with all mortgage applications, lenders will want to see proof of income, although this can be problematic for those working for foreign companies, especially if these companies issue payslips in a language other than English. Even providing proof of address can be difficult as many expats do not have utility bills as these expenses are often taken care of by the company they work for abroad.
Remortgaging for Expats
That being said, there is a huge demand for expat remortgages right now and lenders are slowly beginning to respond to this demand. Finding remortgage options for expats can seem almost impossible by looking on lenders individual websites, but this does not mean that such options dont exist. Getting in contact with a lender directly can reveal some of their products specifically geared towards expats, and it may also reveal that some mortgages listed online as being only for people residing in the UK are actually available to expats, as well. The likelihood of this scenario, however, will depend on personal circumstances, such as whether the applicant is planning on moving back to the UK anytime soon. Additionally, mortgage brokers dealing exclusively with expats also have an online presence, and these firms are good at finding the cheapest remortgage deals and will make the process much smoother for the applicant.
Buy to Let Remortgage
A buy to let remortgage is particularly popular with expats who want to earn income from their UK property while they are abroad. These mortgages obviously have less strict residency requirements since the lender does not expect the homeowner to occupy the property in most cases. On the other hand, a buy to let mortgage often comes with a higher interest rate and includes a greater amount of paperwork. Not only will the applicant need to prove a sufficient level of income and a good credit rating, he will also need to provide a potential rental income for the property as well as a larger deposit than a normal mortgage. Also, some lenders may be wary about lending money to a landlord who will not be able to personally attend to tenants. As with other forms of remortgages, a broker that specializes in expat mortgages should typically have a great level of expertise when dealing with buy to let mortgages as these mortgages are particularly popular with the expat market.
Remortgaging whilst abroad can be a daunting experience for any expat hoping to hold on to his UK property. While the process involves difficult obstacles such as residency requirements, extra paperwork, and rental restrictions, finding the best remortgage deals is not impossible for UK citizens living abroad. By contacting a lender directly or working with specialized mortgage broker, expats can find a remortgage option that is right for their needs.
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