An increasing number of British citizens are either giving up their properties in Canada to relocate back to the UK, or buying a property over here whilst they remain overseas, for a variety of reasons.
This includes the current low UK interest rate environment, which has provided the opportunity to purchase buy-to-let properties and letting them out whilst they are away.
It can be difficult…
Despite having a good income and working in a solid job, you may get your application declined by high street lenders, with many banks withdrawing from the expat market.
However, there are specialist lenders out there who specifically deal with this sort of application.
So why is it so hard?
Lenders in the UK are now strictly regulated, meaning they have to scrutinise an applicant’s details as thoroughly as possible, which can be difficult if you live abroad.
Your UK credit report won’t show any information, which means that your status will have to be looked at via wage slip and Canadian bank statements, whilst your identification and residential status will have to be confirmed by a Canadian lawyer or the British Embassy.
With the volatile currency exchange rates, lenders hesitate to lend to anyone that gets paid in something other than pound sterling.
Each lender is different but it’s likely that, when looking at your mortgage application, instead of using the current exchange rate, they will use the average rate seen over the last few years.
The type of property that you’re looking at purchasing will determine a key part of your lender’s assessment of your application.
For example, properties that you intend on using as a holiday let may be classed as a House in Multiple Occupation (HMO), which will mean that the lender will want to know how you plan on managing this from abroad.
If you work for a multi-national company and have an income equivalent to £40-50k and over, then you will stand in a better position to have your application accepted.
What if I don’t?
You could still be accepted as smaller employers are certainly acceptable. If you’re self-employed, you will need to provide 3 years’ accounts.
Smaller employers are certainly acceptable to many banks and building societies, and some even have no minimum income requirements.
How much can I borrow?
Unlike a normal residential mortgage, you can usually borrow between 4-5x your income, depending on the lender and your application.
If you’re looking at getting a buy-to-let mortgage, then you will need the rental income to cover at least 125% of the mortgage repayment amount at a typical rate of 5.5%.
How do I apply?
It’s a complicated process, but there are many options for you if you’re living in Canada.
For further information on how you can get a mortgage in the UK whilst living in Canada, speak to one of our expert advisers who will be able to walk you through your next steps.