Equity release mortgages for expats: how to capitalise on your property abroad

25th Nov 15
Equity release mortgages for expats: how to capitalise on your property abroad

Whether you are an expat who has retired abroad, or spend a lot of time in a sunny property overseas, we understand that you may be worried about financial difficulty in later life. Many believe there is no way to raise extra cash in this circumstance, or that the only way to do so is to sell. However, we can assure you this is not the case.

If you currently own a property in the UK which you use as your main residence, you should be able to acquire an equity release loan. This form of borrowing is one of the most successful solutions when freeing up cash for anyone over 55, and comes in two different types: lifetime mortgages and home reversion plans. It is also a very effective process for mature expats or those with properties on foreign soil.

How do equity release mortgages work for expats?

Lifetime mortgages are unlike traditional mortgages as the homeowner does not make any repayments on the sum borrowed. Instead, the interest due is rolled up into one, so the loan and interest is paid back once the property is sold after the owner’s death.

Home reversion plans on the other hand, enable you to sell just a proportion of the property in return for the cash. You retain the right to live in the property rent free for life, so your home can be used for private residence for as long as you like and the property is simply sold after death.

Equity release has become an ever-growing business which is branching out across the UK; the average UK pensioner is now getting nearly £75,000 from their property according to recent figures. This is also particularly beneficial during the current financial climate, with rising property prices increasing the amount available to borrow.

If your main residence is an overseas property, a similar transaction is also available. Australia has an equivalent governing body that works in very much the same way as our regulator, there you must be over 60 to access these loans and they refer to them as a reverse mortgage instead of a lifetime mortgage, and a shared sale agreement rather than a home reversion plan.

The US, on the other hand, has only one type of equity release. It’s insured by the federal government and called the home equity conversion mortgage. The qualifying criteria for this plan includes not being a delinquent on any federal debt and having a cleared – or significantly paid down – mortgage.

How to make money from your property abroad

Essentially, the type of equity release suitable for you will depend on your personal circumstances, so financial advice is essential before making a decision. Islay Robinson, CEO of high net worth specialist Enness Private Clients, explained: “There are a number of things to consider when planning for this type of mortgage, most importantly that your family are aware of your plans, as they will be dealing with the property sale and repayment of the loan later down the line.”

Thankfully, at Enness, we can help point you in the right direction. With our wealth management service and expert team of brokers, we will ensure to give you the best advice about your finances and find the lender most suited to you – whatever the situation. You only need to read the Telegraph for proof!

We know how important it is to secure your financial future and make the most out of your property assets. We are proud to work with lenders across the market and are confident in our ability to find the best solution and contact the best lender for our clients, so you can relax in your deckchair carefree.

If you are interested in discussing equity release options further or simply wish for more information, please do not hesitate to contact us anytime.