Expat MORTGAGES

What is an Expat Mortgage?

With expat mortgages there are two types; an expatriate who is returning to the UK  to  get a mortgage after a period of time abroad,

or;

another possible expat mortgage may be that you are moving abroad and would like to convert your residential mortgage into a rental property. This can be beneficial for means of an extra income, or simply to use the rental yield to pay off a mortgage should you ever decide to return.

Regardless of your journey as an expat, we will be at your side to assist with all the extra hurdles you may encounter.

How to get a mortgage as an Expat in the UK?

An application for an expat mortgage is similar to a standard mortgage application in many ways, however, there are a few additional acceptance criteria. This extra criteria is generally just more due-diligence to combat international money laundering & fraud.

Most lenders will require that you must have an address within the UK(a parent or relatives address may be acceptable) and have a UK bank account linked to that address to service the mortgage. Being on the electoral register may also be advantageous to help boost your credit score.

You’ll also need to have a permanent job in the UK, or if you’re self-employed you’ll be expected to show accounts going back three years. You may also have to show proof of other forms of income, such as investments.

Some lenders may require your income and deposit to be paid into a UK bank account with necessary proof of funds.

If they lender accepts proof of credit history in your previous country of residence(e.g. proof of a previous mortgage), they may require that all credit reports must be translated into English by a recognised translation service. Each lender will operate differently and may only accept credit reports from a small list of countries.

How much deposit is required for an Expat Mortgage?

Generally a deposit of 25% and sometimes 20% of the property’s value is required, but this can vary depending on the location and the property type. A select few lenders may require less under the right circumstances.

How much can I borrow for an Expat Mortgage?

The answer to this question comes down to affordability. How much you earn versus your outgoings.

Expat mortgage lenders will also factor in other criteria, such as how much deposit you have and your credit history.

Every lender is different and they tend to use their own affordability models based on net disposable income.

They then apply their own cap based on income multiples. So the amount that you can borrow is usually determined by multiplying your annual salary (or combined salaries if there is more than one of you applying).

Most lenders will work on 4-4.5 times income, while some will allow mortgages of up to 5 times income and some lenders will allow up to 6* depending on circumstances.

Contact us today to discuss your circumstances and see how much you are able to borrow.

 

Can you get an Expat Mortgage with a 10% deposit?

Finding a UK expat mortgage with a 10% deposit is possible, but you’ll need the right advice from a mortgage broker who may be able to find a specialist lender who would consider a 90% LTV mortgage.

Contact us today for a free, 30 minute, non-obligatory appointment to discuss your circumstances and see how much you are able to borrow and what deposit is needed for your expat mortgage.

What happens to your mortgage if you move abroad?

If your property is left vacant within the UK your insurance may be rendered invalid, therefore putting your property at risk if any damage happens to it whilst you’re away.
 
In many cases it makes sense to rent out your property through a rental management agency as an extra means of income or simply to pay off your mortgage should you ever decided to return to the UK. 

Expat Buy-to-let Mortgages UK

As an expat, having a BTL mortgage can be a worthwhile investment especially if you may plan on moving back to the UK at a later stage.

Your circumstances have changed e.g. your job may require you to move country.

For this many people choose a BTL mortgage to simply just pay for the mortgage or if you expect a high yield from your BTL it may be useful for an extra source of income.

If your property is left vacant within the UK your insurance may be rendered invalid, therefore putting your property at risk if any damage happens to it whilst you’re away. Therefore in many cases it makes sense to let out your property as an extra means of income.

Expat BTL mortgages are very similar to regular BTL mortgages however they just require more due-diligence from banks and lenders to prevent against international money laundering or fraud.

A typical deposit would be of at least 25% and sometimes 20%.

It is important to note that there will be fewer lenders which will provide expat buy-to-let mortgages.

See more on Buy-to-let(BTL Mortgages) – including how much you can borrow, other implications including tax and considerations including rent yield when getting any kind of buy-to-let mortgage.

Sources of deposit for an Expat Mortgage?

Each lender will have different rules for deposits, but the following sources of deposit are most common when getting an expat mortgage:
 
  • Savings in account (UK or overseas depending on country)
 
  • Investments (Stocks / shares / capital held in the UK or abroad)
 
  • Sale of property (UK or overseas, again depending on country)
 
  • Equity in another property (This is simplest if the property you own is in the UK, but may be possible with an overseas international mortgage/secured loan lender. If the property is in the UK there are many lenders who will consider expat remortgages or secured borrowing, to secure a charge against a property you already own).
 
  • Inheritance – this must actually have gone through probate. Lenders will not consider a will as proof of deposit as they can be changed or the person on the will may not pass on for many years.
 
  • Gifted deposit. Typically expat lenders would prefer you to have your own deposit, but it may be possible for some to consider a deposit coming from a close relative. Although it may be possible, depending on the circumstances, for a friend or third party to gift deposit, but very few lenders will consider this.