Is it ever a good idea to remortgage?

mimiti

Hello all. In need of advice.

I own a one-bed flat outright (100 year leasehold but no mortgage) valued at £375k.

With my partner we would like to buy a second property abroad and eventually move there, but would at first live in our one-bed so we can keep working to pay for the overseas property.

What happens if we remortgage the flat and miss a payment? does the bank repossess the property abroad to recover its money or the flat here?

amnblog

The Bank does not repossess based on one missed payment.

The property used as security for the mortgage is the one at risk of repossession if you do not pay - in this case the flat in the UK.

Nebulous2

It's a relatively straightforward thing to do. I've done something similar to buy a second home, which will eventually become my retirement home.

However the way you've worded your post it sounds like you don't want to, rather than asking for advice on whether you can.

We jointly owned our house, were very much in agreement, looked around for a long time including abroad and are happy with the outcome. I was very aware that any decision I made heading into retirement would be more difficult to unwind, so we needed to get it right.

ACG

You would need to miss 3-6 payments on the trot before the lender starts the repossession proceedings.

They would only have a charge over the property in question so would not touch the property abroad for the average person.

Just set up a direct debit, the payments will go out of your bank each month without you having to do anything.

csgohan4

can you afford a second house if your contemplating missing a payment or more?

the 100 year lease is also a ticking time bomb which needs to be addressed sooner rather than later as the longer you leave it the more expensive it becomes to renew

AnotherJoe

If you are in such restricted financial circumstances you are already contemplating you might miss one months payment then you can't afford this.

robatwork

I would earmark some of the remortgage for buying a 899 year lease extension if possible.