Client
A British expat living in the USA who enquired about refinancing one of their buy-to-let holdings – in this case a two-flat multi-unit block on a single freehold. They came to us for an expat mortgage to release equity from a property they had bought for cash.
Background
The client had purchased the multi-unit block outright with cash and was now looking to release the equity to fund further property purchases. A two-flat block on one freehold is a slightly more specialist property type than a standard single dwelling, which narrows the number of expat lenders comfortable with it from the outset.
Requirement
- Refinance a two-flat multi-unit block held on a single freehold
- Release equity from a property bought outright for cash
- Use the funds raised to finance further buy-to-let purchases
- Satisfy the lender’s minimum income and UK credit-footprint requirements from the US
Challenges
The challenges around an expat mortgage usually centre on credit score (or lack of one) and whether the client has any open lines of credit in the UK, alongside a valid UK bank account for the monthly direct debit. Most expat lenders also have a minimum income requirement, and expat clients are invariably paid in a currency other than Sterling – so lenders shave a portion off the income to allow for exchange-rate fluctuations, and some look back over the last five years and take the rate at its worst to underwrite on a worst-case basis. Layered on top here was the multi-unit freehold structure, which not every expat lender will accept.
Solution
We structured the case as an expat buy-to-let refinance, matching the client to a lender comfortable with both the multi-unit freehold property type and US-dollar income. Having confirmed the client’s UK bank account and credit footprint upfront, and worked the affordability around the lender’s currency shaving, we were able to place the case cleanly and release the equity the client was after.
Outcome
The client successfully refinanced the cash-purchased multi-unit block, releasing the equity needed to fund further buy-to-let purchases. For an idea of what you could raise in a similar scenario, our expat mortgage calculator gives an instant estimate.
Summary
Refinancing a cash-bought property is a common way for expat landlords to recycle equity into the next purchase, but a multi-unit freehold and overseas income both narrow the lender pool. Getting the country, currency, property type, and likely loan-to-value straight before anything is submitted is what keeps a case like this moving – browse our other expat mortgage case studies for similar examples.
Key Point
Things to consider when discussing a UK expat mortgage:
- Interest rates are higher than on standard mortgages.
- Lender arrangement fees are usually a percentage of the loan rather than a flat fee.
- Check what credit you still hold in the UK – an active bank account will be needed.
- Certain countries will not be accepted by lenders.
- Certain currencies will not be accepted by lenders, usually where the currency is considered volatile.
- Loan-to-values can be restricted, and multi-unit freeholds narrow the lender pool further.
Frequently Asked Questions
Can an expat remortgage a property they bought for cash?
Yes, refinancing a cash purchase to release equity is common.
It lets you recycle the capital into your next purchase without selling the property.
Can an expat get a buy-to-let mortgage on a multi-unit freehold block?
Yes, but fewer lenders accept multi-unit freeholds.
A two-flat block on one freehold is a more specialist property type, so it narrows the pool of expat lenders willing to consider it.
How do lenders treat US-dollar income on a UK expat mortgage?
They usually shave a portion off to allow for exchange-rate movements.
Some lenders go further and underwrite against the worst exchange rate seen over the last five years.
Do I need a UK bank account for an expat buy-to-let remortgage?
Yes, a valid UK bank account is required.
It’s needed for the direct debit that collects the monthly mortgage payment once the case completes.
If you have any questions relating to an expat buy to let mortgage, contact us today to speak directly with one of our CeMAP certified Mortgage Advisors.
Expat Mortgages UK is a specialist broker directly authorised and regulated by the Financial Conduct Authority. We work exclusively with expats and foreign nationals buying UK property with overseas income. Your home may be repossessed if you do not keep up repayments on your mortgage.
Call: +44 1494 622 555 Email: info@expatmortgages-uk.com
Related Pages
- buy-to-let mortgages for US-based expats – How lenders assess buy-to-let applications from British expats in the US.
- remortgages for US-based expats – Releasing equity or switching rate on a UK property from the US.
- expat mortgage application guide – The documents, timeline, and steps involved in getting an expat mortgage approved.
- currency haircuts explained – Why lenders discount foreign-currency income and how it affects borrowing.
- expat mortgage case studies – Real examples of expat and foreign national UK mortgage completions.