hawthorne Posted July 28, 2013 Share Posted July 28, 2013 Hi all I had a call with John Charcol brokers on Friday who said there was no-one in the market who will consider refinancing our UK house to release equity for the move to Australia. Our existing lenders have said they will let us carry on for a steep fee with no increase in interest rates but won't release equity. Reason was that few wanted to lend to people who would be expats, and we 'only' have two years accounts as directors of our company (though we are a successful business and have no adverse credit events)... Other brokers have said they can arrange things but only if we supply a UK address and when pushed on the legitimacy of the fact we will be living abroad say 'it will be fine if you keep up repayments'... I don't want to enter a contract that depends on us not disclosing material facts... I've been very surprised by how tight the mortgage market seems to be as I would consider us low risk. Is this other people's experience or any suggestions of other places to try? Thanks for any thoughts. Hawthorne Link to comment Share on other sites More sharing options...
Rupert Posted August 4, 2013 Share Posted August 4, 2013 This is entirely normal, lending to anyone who is about to depart the country would be very high risk behaviour. Link to comment Share on other sites More sharing options...
Gbye grey sky Posted August 4, 2013 Share Posted August 4, 2013 Also would think that if the only real means of financing the move was my property I would consider selling up and releasing the equity that way. Burdening yourself with a debt that you would need to repay while establishing yourself abroad would make it tough. Not sure what use the business accounts would be if you are leaving the business to live in Oz. Are you able to realise any money by selling the business to fund the move? Link to comment Share on other sites More sharing options...
hawthorne Posted August 5, 2013 Author Share Posted August 5, 2013 Hi Thanks for the replies - Rupert - so it seems, just wasn't anticipated... G'bye... we didn't need the equity to fund the move, the thought was rather that the combination of lower interest rates in UK plus strengthening pound would mean it was efficient to maximise equity release from UK house to minimise mortgage in Australia. Of course, there is the chance that the interest rates could cross the other way depending on events! Thanks again H Link to comment Share on other sites More sharing options...
CrozierFamily Posted August 5, 2013 Share Posted August 5, 2013 Hi all I had a call with John Charcol brokers on Friday who said there was no-one in the market who will consider refinancing our UK house to release equity for the move to Australia. Our existing lenders have said they will let us carry on for a steep fee with no increase in interest rates but won't release equity. Reason was that few wanted to lend to people who would be expats, and we 'only' have two years accounts as directors of our company (though we are a successful business and have no adverse credit events)... Other brokers have said they can arrange things but only if we supply a UK address and when pushed on the legitimacy of the fact we will be living abroad say 'it will be fine if you keep up repayments'... I don't want to enter a contract that depends on us not disclosing material facts... I've been very surprised by how tight the mortgage market seems to be as I would consider us low risk. Is this other people's experience or any suggestions of other places to try? Thanks for any thoughts. Hawthorne Hi The amount you can release in equity from your mortgage will be influenced by the LTV (value of loan vs value of property). So part of the decision may be influenced by you hitting a threshold in that respect. Equally, all though you may disagree, the fact that you and your partner own your own business will make you more of a risk in a lenders eyes so this could be a small part of the decision. Indeed the fact you are going to be residing outside the country also increases the risk posed to the lender, as does the fact you are renting your property out (if that is what you plan to do), so unfortunately in a lenders eyes you are probably not viewed to be low risk. Releasing equity is not something lenders are massively keen on these days compared to pre-crisis, as by it's very nature it is a higher risk than a standard mortgage etc. There are probably a number of reasons why you cannot find the provider, did the broker not outline some of the reasons they think are impacting your specific case? To be honest though, you describe a number of things that will be viewed as a higher risk to a lender than most, so when you put them all together it is perhaps not overly surprising that you may struggle to find a lender in this market. Your LTV is important though and you do not mention what that is. If it is still low after you release the equity you maybe could have expected to find something. Link to comment Share on other sites More sharing options...
Rupert Posted August 5, 2013 Share Posted August 5, 2013 Hi Thanks for the replies - Rupert - so it seems, just wasn't anticipated... G'bye... we didn't need the equity to fund the move, the thought was rather that the combination of lower interest rates in UK plus strengthening pound would mean it was efficient to maximise equity release from UK house to minimise mortgage in Australia. Of course, there is the chance that the interest rates could cross the other way depending on events! Thanks again H Not a good idea to borrow in one currency in order to invest in another, so I think it is no bad thing that you were unable to find a lender. Some basic principles to follow are to try to match assets and liabilities plus income and expenses by currency wherever possible. Anything else leads to trouble.. Link to comment Share on other sites More sharing options...
hawthorne Posted August 6, 2013 Author Share Posted August 6, 2013 Not a good idea to borrow in one currency in order to invest in another, so I think it is no bad thing that you were unable to find a lender. Some basic principles to follow are to try to match assets and liabilities plus income and expenses by currency wherever possible. Anything else leads to trouble.. Thanks Rupert, interesting point... it's not the end of the world, I was just surprised - take your point about us being high risk after all, I hadn't thought of it like that but not an expert in the field by any means. On the asset/liability, income/expense matching principle, how would you view that as it applies to moving (non-house equity) cash? Take a scenario where someone has made allowance for the cost of moving etc and is in the fortunate position of having a fairly substantial savings balance. If they move it all over they could put down (say) a 30% deposit on a house purchase in Australia. Is this better than only putting down a 10% or 20% deposit and using the remainder to pay down the mortgage in the UK? Is there a significant difference in the interest rate you can get by putting down a larger deposit, for example? I've done some spreadsheets on this looking at cash values but am new to trying to factor in the cross-currency stuff and don't have any in depth knowledge of the Australian mortgage market so any thoughts appreciated. I realise that individual circumstances are paramount at any level of detail but curious if you have any general comments... Very best H Link to comment Share on other sites More sharing options...
CrozierFamily Posted August 6, 2013 Share Posted August 6, 2013 Thanks Rupert, interesting point... it's not the end of the world, I was just surprised - take your point about us being high risk after all, I hadn't thought of it like that but not an expert in the field by any means. On the asset/liability, income/expense matching principle, how would you view that as it applies to moving (non-house equity) cash? Take a scenario where someone has made allowance for the cost of moving etc and is in the fortunate position of having a fairly substantial savings balance. If they move it all over they could put down (say) a 30% deposit on a house purchase in Australia. Is this better than only putting down a 10% or 20% deposit and using the remainder to pay down the mortgage in the UK? Is there a significant difference in the interest rate you can get by putting down a larger deposit, for example? I've done some spreadsheets on this looking at cash values but am new to trying to factor in the cross-currency stuff and don't have any in depth knowledge of the Australian mortgage market so any thoughts appreciated. I realise that individual circumstances are paramount at any level of detail but curious if you have any general comments... Very best H Hi It is normal practice that the lower your loan to value %, the more good deals will be available to you, but once you get your LTV below between 60-70% you will probably find most of the best deals are available from that perspective. So if you are putting down 30% (which makes an LTV of 70%) I would guess a large proportion of the best deals would be available to you (assuming no other issues with not having a PR etc if that is the case). The best way to see what restrictions apply for LTVs and other restrictions is to look on the main banks websites and see what conditions are attached to their current mortgage offers, you can them reasonably simply work out the difference in costs between the different options you have suggested. There are loads of different ways to skin this particular cat depending on your individual circumstances though, so I would recommend you get some proper financial advice from someone who can look at all of your information and give you thoughts based on that. I don't think anyone on this forum would be able to give you a proper answer without a full review of your finances. Link to comment Share on other sites More sharing options...
hawthorne Posted August 7, 2013 Author Share Posted August 7, 2013 Yes I think the answer is to get a mortgage broker when we get out there and get the market overview... Link to comment Share on other sites More sharing options...
pope6 Posted August 11, 2013 Share Posted August 11, 2013 Hi all I had a call with John Charcol brokers on Friday who said there was no-one in the market who will consider refinancing our UK house to release equity for the move to Australia. Our existing lenders have said they will let us carry on for a steep fee with no increase in interest rates but won't release equity. Reason was that few wanted to lend to people who would be expats, and we 'only' have two years accounts as directors of our company (though we are a successful business and have no adverse credit events)... Other brokers have said they can arrange things but only if we supply a UK address and when pushed on the legitimacy of the fact we will be living abroad say 'it will be fine if you keep up repayments'... I don't want to enter a contract that depends on us not disclosing material facts... I've been very surprised by how tight the mortgage market seems to be as I would consider us low risk. Is this other people's experience or any suggestions of other places to try? Thanks for any thoughts. Hawthorne Barclays International (IOM) will remortagage a UK house for an expat who lives and works overseas: http://www.barclayswealth.com/international/mortgages-loans/borrowing-more.htm Link to comment Share on other sites More sharing options...
Guest The Pom Queen Posted August 11, 2013 Share Posted August 11, 2013 I have moved your thread to the general money/finance forum. If you have a direct question for our resident mortgage/financial advisor please post it here: http://www.pomsinoz.com/forum/financial-advice-ask-vista/ Link to comment Share on other sites More sharing options...
RoseBrown1972 Posted August 11, 2013 Share Posted August 11, 2013 I have just used liquid expat mortgages to get a remortgage on a property that i half own with my brother as i'm buying his share, the mortgage is with clwydsdale. Been quite an easy process, provided proof of oz income, proof of uk tennant, now waiting on result of survey Link to comment Share on other sites More sharing options...
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