A remortgage for expats can either be relatively straightforward or extremely complicated, depending on the situation.
I was recently approached by a husband and wife who were currently living over in the US. They had moved there about a year ago with work, and were planning to come back to the UK in the not-too-distant future. For this reason, they had kept the UK property they owned, which was located in Hampshire and valued at £950,000. They were letting it out while they were overseas.
Their current mortgage was with a private bank, who had notified my clients they were no longer able to help them due to their changing status. My clients were therefore in the market for a remortgage in the region of £600,000. Because they were over in the States, however, they were having trouble finding a lender willing to take them on. At this point, they came to me in the hope I would be able to come up with a solution.
The first difficulty was that, in the view of most lenders, the figures didn’t quite stack up. The amount my clients were looking to borrow, relative to the rent they were receiving, didn’t fit most standard rental calculations.
Another issue was the significant chunk of outstanding maintenance payments the husband still had to make. Under the strict affordability tests introduced by the Mortgage Market Review (MMR) back in 2014, lenders are required to go over all applicants’ outgoings and spending with a fine tooth comb, and these payments were flagged as potentially problematic.
All this meant I needed to find a lender who would look at their overall financial picture during affordability checks, and not just take their rental income into account. Their intention to return permanently to the UK in two years was a help, and meant I was confident I would be able to find a lender to take a view.
I managed to secure a £625,000 mortgage for my clients, a 2-year fixed rate deal at 3.89%. This was an excellent result for them, and they were delighted.