If you have accepted a post abroad and have decided to rent out your existing property, or if you’re looking to buy somewhere before you return home, major lenders can find it hard to engage with these scenarios. Some may refuse to give consent for an expat mortgage and others may offer you a buy-to-let option at a higher rate than the standard variable you were expecting.
The Mortgage Hut are experts in helping clients to arrange good value expat mortgages. We typically work with smaller building societies and private banks who we know could be willing to offer expat mortgages at competitive rates and who can complete within the timescale pressures you may be under.
Why are expat mortgages difficult to organise?
Expat mortgages fall into two categories; People who are about to move abroad and wish to retain their property here – usually to rent out, and people who are currently living abroad and are planning to return home at some point in the future.
Many of the major lenders are less inclined to support non-standard mortgage lending these days – and that includes expat mortgages. Many are also unable to work at the speed or at a convenient time to match your international lifestyle.
Overseas Income and Credit Rating
If your primary income is earned overseas then this presents problems for the lender on various levels.
Accurate details around the sustainability of your income, as well as its actual level, are harder to ascertain given variables such as fluctuating exchange rates. The mortgage provider will also have more difficulty in actually identifying your employer if they are based abroad. The difficulty in getting hold of all of the relevant information, coupled with the risk of fraud that comes with it, leads many mortgage lenders to refuse expats outright or to at least charge higher rates to those they do lend to.
It’s a similar story when it comes to credit rating. Your credit history is important to a mortgage lender as it allows them to see how viable a candidate you are for borrowing money. If you’ve lived abroad for a relatively long time, then your credit history might not be traceable at all. This does not necessarily make you a bad candidate to lend to, but it does make you an unknown quantity and this leads lenders to err on the side of caution.
Expat mortgages for non-UK residents
If you wish to buy a house in the UK and use it as your primary residence, some lenders will consider advancing up to 95% of the purchase price. Lending criteria and mortgage terms vary tremendously and different lenders will use their own policy to determine a maximum loan figure.
In addition to the offshore lenders, a number of UK based banks and building societies will now consider applications from British expatriates planning to purchase a home in the UK.
Expatriate lenders will use income multiples, affordability and employment status before offering mortgage terms. Some lenders have strict policies and rigid lending criteria whereas others are more flexible and consider individual circumstances before issuing a mortgage offer.
Unfortunately, some lenders who initially accept applications from expats decline them later during the underwriting stage when strict lending criteria cannot be fully met.
Contact our team of professional mortgage advisers today and see how we can help you with an expat mortgage.