2nd Charge Lending

Its a very niche market but there are options available to you as an expat should you require further finance secured against your property.

Second charge lending is a higher risk to the lender and subsequently is always more expensive than a first charge mortgage. The interest rates are higher and the set up fees are higher, but on a positive note this type of finance is often easier to obtain than a normal mortgage.

Most secured loans are for amounts far lower than a mortgage, this makes the higher interest rate less of an issue. If you borrowing £200,00 for example, a 3% difference in interest rates makes a significant difference in your monthly payments, however if you are only borrowing a further £20,000 the difference in cost is much less significant.

Quite often you will find that a mortgage will be available to you to purchase your property, but if you return to the lender asking for funds for home improvements, debt consolidation or to purchase another property for example they will decline to lend.

If your first choice for capital raising is remortgaging your property to a new lender you might find you incur large redemption penalties to exit your existing deal. If you are on an Interest Only mortgage you might well find that the new lender insists that you convert to a Capital Repayment scheme these days, this can increase your monthly repayments significantly and make the process too expensive.

Many lenders that were once happy to lend to expats have changed their criteria, whilst they are happy for you to remain a customer they will no longer entertain applications for any type of borrowing from an expat.