Buy to let mortgage for expats?

gb1ker

Hi, we moved to Spain at the beginning of the year and would like to buy a property here. We have a house in the UK worth c. 350,000 which has a mortgage of approx 125,000 on it currently. We rent it out for £1400pcm and we'd like to remortgage it to raise an extra £75,000 give or take a few thou so that we can put a deposit on a property over here. The remortgage we assume, would have to be a buy to let and repaid with the rental income as our salary would go to pay off the Spanish mortgage we also need. We hear that most lenders aren't currently interested in this sort of thing for expats, anyone know different or have any advice? We imagine that we would sell our UK house after 2 - 5 years although that's not a certainty.
Thanks!

theartfullodger

Why are English people wot go to another country prone to call themselves "ex-pats" when people doing it V-V get called by them "Immigrants". Don't they realise they are immigrants???

Discuss:

Cheers!

Lodger

gb1ker

That's really helpful mate, thanks.

TMSL

Try Bank Of Scotland international they do have a fairly heft minimum earned income requirement, good luck

herbiesjp

There are lenders that can look at this for you.

What is in your favour is the LTV

What might go against you is the rental coverage/calculation - so you might be able to raise some extra, but not the £75k

This would need a fair bit of work to place/look into, to make sure you fit the criteria on all fronts.

This scenario would definitely benefit from the help of a whole of market adviser

Jonbvn

Try IMP as per the link.

http://www.international-mortgage-plans.com/index.html

BTW, I have no interest in this outfit, but have used them previously when an expat.

property.advert

I think it really depends upon whether you have told your current mortgage provider that you are renting the house out. If you have, then you cannot very well "hide" that fact. If you have not, then you could simply get a further advance from them.

Whilst staying within the law, you do not have to tell them that you would be making only a deposit on a foreign property. If they were to know that, then the added cost of servicing a foreign mortgage would increase their overall risk, though your very significant equity should make that largely, though probably not totally, irrelevant.

If you are not earning Euros to service the proposed Euro mortgage then please think about the FX risk. The same goes for the sale of your UK house in your stated timeframe of 2 to 5 years. Think how Sterling has depreciated against the Euro in that time and perhaps consider financial derivatives (they need not be overly complex so do not be scared if you are not familiar with them) which would preserve the GBP valuation of your house (or a higher valuation), though at some percentage cost. If losing 10% or 20% (you would still receive the gain if it went the other way) due to currency fluctuations is not an issue then fine. I covered a Japanese Yen mortgage on a UK property for FX risk some years ago and would not have wanted a Euro mortgage from years when the rate was 1.6 to 1 !!!

You might also find that getting a new UK mortgage is a better deal than another advance. Alternatively, if a lender does Euro mortgages, then you may want to explore whether they could do both sides of the equation. That would mean opening all your finances up to scrutiny though.

gb1ker

Thanks for the replies and advice!

Conrad

BM solutions can also look at. Expect very tough underwriting both in Spain and the UK.