Ex Pat Remortgages

Posted on 16 January 2011 by Darren


My partner and I have are 1 year into a 3 year fixed rate mortgage. When we borrowed we had less than 25% equity and got a poor interest rate. By the time the 3 years is up we should have over 25% equity from improvements and prices going up. I estimate that remortgaging after the fixed rate is up should get us a rate at least 2% better than we have now. The problem is we want to go abroad in the next 12 months and may be away for a few years. Is there any way to remortgage while abroad? Or how long would we have to be back for to pass the credit check?

Darren,

First of all you will need to tell your existing Lender that you are going abroad and if you intend to let the property in your absence you will need to apply for their consent. Failure to do so could result in you being in default of your mortgage contract and ultimately open to having your home repossessed.

Most Lenders will consent if you are moving through work or necessity and may even let you stay on your existing residential interest rate. Others will either load the rate you pay or transfer you on to a Buy to Let mortgage.

With regards to remortgaging whilst you are away, it is currently possible and I do not see that situation changing. The number of Lenders available to choose from is restricted and the rates that will be available to you are unlikely to be better than your current rate, especially if interest rates increase over the next few years as they are expected to.

Fortunately the Lenders in this market understand that your credit score is likely to suffer from your absence and less reliance is placed on this. However I do suggest that you maintain your current UK bank account and any other credit commitments if you do go away as this will help any future mortgage application.

I recommend that you speak to an independent mortgage broker with access to both the Home and Offshore mortgage markets if and when you wish to remortgage.

Peter

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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