If you’re a UK expat who is making plans to purchase a property back home, it’s likely you’re wondering whether you’ll be able to get a mortgage and what the process of applying might look like. The answer is typically yes, you will be able to get a mortgage for the property you wish to buy, but it can be a little more complicated than if you had always been living in the UK.
Here at The Mortgage Genie, we have a team of expert expat mortgage brokers who have a lot of experience of handling cases like yours. So, if you’re looking to buy a home, either for your family or as an investment, we would love to help you through the process! If you would like support in this area, get in touch with us today by calling 033 33 44 33 72 — we’ll be waiting to help you find the perfect mortgage product and submit your application to give you the best possible chance of success.
We’re sure you also have lots of questions about the intricacies of getting a mortgage as an expat. So, we’ve put together this guide to answer them and talk through the process you’ll likely follow. Here, we’ll cover:
Read on to learn everything you’ll need to know, so you’re properly prepared to purchase a property as a UK expat.
Expat mortgages are designed for former UK residents who now want to purchase a property back home. They’re for people who no longer live in the UK, or who have recently moved back after spending an extended amount of time living in a different country.
There are many different reasons why you may wish to purchase a property back home with an expat mortgage. For instance, you might feel ready to put some roots down in the UK, you may dream of having somewhere consistent to stay whenever you visit, or you might want to buy a property as an investment.
Expat mortgages will typically work in the same way as regular mortgages, although the lender’s checks and eligibility criteria that you need to satisfy are likely to be much stricter. This is because these mortgages are usually seen to come with a higher level of risk.
Getting expert advice from a mortgage broker who regularly works with expats is highly recommended, as they’ll be able to help you find the best possible deals and increase your chances of approval. And, they’ll even be able to help you fill out the paperwork so you get everything right the first time around.
Yes, whether you’re an expat moving to the UK or you’re still planning on living abroad, you can get a mortgage in the UK as long as you meet all of the necessary criteria.
The checks you need to pass will typically be more stringent than usual because lenders do tend to believe there’s a higher level of risk associated with mortgages taken out by expats. But, as long as you have a healthy deposit, a strong credit score, and a stable income that can easily cover the repayments, there’s really no reason why you shouldn’t be able to buy the property you want.
While securing a buy-to-let mortgage as an expat can be difficult, it’s certainly not impossible. And, with more and more people now purchasing investment properties from overseas, there are actually some lenders who have started to offer buy-to-let mortgages specifically designed for people in your situation.
It’s incredibly important that you get your application right, though, because lenders will be very strict when assessing your situation. And, while there will be certain checks every lender will typically conduct, some will also have their unique criteria that you need to fulfil. For instance, some will only consider lending to you if you’re located in certain countries, while others will be more flexible.
It’s also worth noting that many lenders won’t accept your buy-to-let application if you don’t already own a residential property in the UK. But you don’t need to worry too much if you’re in this situation — there are definitely some lenders that will still provide you with a buy-to-let mortgage. You just need to know how to find them, and an expert mortgage broker will be able to help you with this.
Unfortunately, it can be more difficult to secure a UK expat mortgage, but don’t let this deter you. As long as you seek the help of a mortgage broker who’s well-versed in helping people in your situation, you make sure you’re in a great position to buy, and you fill out your application perfectly, you can secure the property you’ve been dreaming of.
As we’ve previously mentioned, because lenders tend to believe expat mortgages come with a higher level of risk, you’ll usually need to satisfy stricter lending criteria than if you were to apply for a loan under more traditional circumstances. It’s important that you know what you’ll be up against so you can ensure you’re properly prepared. Here are the main factors all lenders will look at when considering your application:
How much you’ll be able to borrow with an expat mortgage will depend on two main factors: how big of a mortgage deposit you have and what your total provable income is.
When trying to secure an expat UK mortgage, you’ll typically find that most lenders are willing to offer you a mortgage that equates to between 3.5 and 6 times your total annual income. Although, there are other factors that can affect this, such as your employment history, any other debts you currently have, what your credit history looks like, whether you have any financial dependents, and what your total financial outgoings add up to. If you’re looking to purchase a buy-to-let property, the projected income that you’ll make from the rent will be taken into account, but you will typically need a larger deposit to secure the type of mortgage you’ll require.
When buying a property that you intend to make your primary residence, you may be able to secure a mortgage with a loan-to-value (LTV) of 95%. This is the portion of your property’s value that you’ll be able to borrow, which means you’ll need a deposit of at least 5%. These mortgages can prove to be very risky for lenders, though, so they’ll often come with high interest rates and fees, as well as particularly stringent eligibility checks.
Expat mortgages have traditionally required a deposit that’s equal to 25% of the value of the property you’re looking to purchase. But, the requirements can vary a lot depending on who you’re looking to borrow from, the area you wish to buy in, your current financial circumstances, and the type of property you have your eye on.
In some circumstances, you may be able to secure an expat mortgage with a 10 or even 5% deposit, but these products do tend to be quite rare. And, often, it can be worth saving up a bit more if you’re in a position to do so as, the bigger your deposit, the more deals you’ll have access to and the cheaper your home is likely to be overall.
There are international anti-money laundering laws in place, which mean you’ll come up against strict restrictions concerning how you can fund your mortgage deposit. And, you’ll also need to be able to prove where the money came from.
Acceptable sources include but aren’t necessarily limited to:
It’s well worth keeping this in mind before you submit your application as, if your deposit has come from a source that isn’t accepted or you can’t prove where the money has come from, you may be rejected.
It is possible to get an expat mortgage if you have bad credit, but it does add another level of complication that can make the process more complex and expensive overall. You should already have decided to work with an expat mortgage broker who will be able to help you find the best mortgage product for your needs, and they’ll also take your credit history into account when choosing which lenders are likely to accept your application.
Simply having bad credit certainly doesn’t mean that it’s going to be impossible for you to take out the loan you need. You just need to ensure you’re properly prepared and that the rest of your application satisfies all of the necessary requirements.
We hope you now feel that you have all of the information you need to start your journey towards securing an expat mortgage. Whether you’re wishing to put down more permanent roots in the UK or you want to purchase a property as an investment, it can be a fantastic move for you and your family.
We’re here to help you through the process, too. So, if you’re set on purchasing a property as an expat and would like us to help you find the perfect mortgage product, apply to your chosen lender, and navigate the often confusing process, get in touch today on 033 33 44 33 72! We’ll be waiting for your call.