ARE YOU A UK EXPAT LIVING ABROAD LOOKING FOR A MORTGAGE?
R3 Mortgages can help arrange property finance for UK expats in over 30 countries.
What is an Expat Mortgage and how does it work?
An expat is someone who’s residing in a country that they’re not holding nationality of. Therefore, you’re a UK expat if you’re from the UK but currently living in another country. Expat mortgage is a kind of mortgage for borrowers who are living overseas and plan to buy a property in the UK. The process can be rather difficult as compared to standard mortgages. However, UK Expat Mortgage works the same as a regular mortgage. However, few mortgage lenders have strict eligibility criteria due to the perceived added risk linked to expat lending.
An expert advice from a broker is always recommended if you’re applying for an expat mortgage. This can accelerate your chances of mortgage approval. Moreover, your mortgage broker will represent your case in the best possible way while minimizing the risk of rejection. Once in possession of your entire case, your lender will take a holistic view of your complete wealth and assets profile to satisfy their lending criteria and provide a customized approach according to your case.
Types of Expat Mortgages?
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You may want an expat mortgage on a residential property in case:
You plan to move back to the UK and want a property here for when you move.
You’re residing overseas, but your family such a s wife and/or children live in the UK, and/or you want to buy a property for them to live in the UK and for you when you return back.
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You may want an expat mortgage on a Buy-to-Let property in case:
You’re planning to remortgage a residential property onto a Buy-to-Let basis because you’re about to move to foreign country
You’re residing overseas and have consent to let on a UK property but want to remortgage it onto a Buy-to-Let basis. You’re living overseas and are renting out your property in the UK, possibly under consent to let rules with your original lender – but you want to remortgage it onto a buy-to-let basis in order to raise money.
Expat Mortgage and Interest Rates
The increased risk and case complexity of lending to an expat is reflected with slightly higher rates of interest, but the difference is very little. It’s always advisable to compare other mortgage products before signing any mortgage offer.
Factors To Consider When Applying for an Expat Mortgage
Although the Expat Mortgage process is quite tough, but it doesn’t mean your case would be rejected for this type of product. Having a good understanding of all the factors and help from experts can help you on your way. However, there are a couple of key elements that are considered important for an expat mortgage.
Your Credit History
Credit history is one of the main factors for mortgage lenders as it allows them to see the kind of applicant you are and gives them a clear picture and decide whether or not you can make repayments. Living abroad, your UK credit history may not be as up-to-date as a lender would like; however, this does not mean you won’t be accepted. All you would need to do is ensure that the UK credit history you do have is strong and constant, even if it's a few years old; as long as it's evidenced and clear, it shouldn’t be too much of an issue.
Financial Ties To The UK
As an expat, it is often helpful to keep some sort of financial connection to the UK. This connection can be of any kind, including owning a business to have a credit card that is registered with a UK address. This would reflect that you have at least some connection with the country in which you were born. There are, however, potential tax implications to this, which is why we advise speaking to a tax specialist too.
Many expats plan to return to the UK at some point in the future and look to invest in their home country. Getting an expat mortgage can be tricky due your overseas status but not impossible. A lender may consider:-
Country you are working in
Your employment status and employer
Your UK Credit History Footprint
If you have a UK bank account to service the borrowing
If you are a UK Expat and interested to know more about your financing options whilst your overseas, contact us today for a free initial consultation. For Stamp Duty queries, you can contact a solicitor/conveyancer or HMRC.
UK Expat Mortgages
Are you an expat looking to buy a residential or buy to let property in the UK?
At present, non UK Residents pay the same Stamp Duty Land Tax rates as UK residents when buying residential property for owner occupation or as an investment..
However, in 2018 the UK Government annouced a stamp duty land tax surcharge for non UK residents buying residential property in the United Kingdom. This was echoed in the Budget in 2020 (Section 2.35 Property Tax) where the government announced a 2% SDLT surcharge to take into effect from 1st April 2021 and UK Expats could fall into this category. This is because you could be deemed non residents if you do not spend at least 183 days in the UK. The rationale for introducing this surcharge was to ‘help to control house price inflation and to support UK residents to get onto and move up the housing ladder’.
Ultimately, this could mean that even UK Expats pay the same rates as Foreign nationals for buying property in the UK.
Many expats plan to return to the UK at some point in the future and look to invest in their home country. Getting an expat mortgage can be tricky due your overseas status but not impossible. A lender may consider:-
Country you are working in
Your employment status and employer
Your UK Credit History Footprint
If you have a UK bank account to service the borrowing
Also, some lenders accept expats buying UK property in a Limited Company Structure such as a Special Purpose Vehicle SPV.
If you are a UK Expat and interested to know more about your financing options whilst your overseas, contact us today for a free initial consultation. For Stamp Duty queries, you can contact a solicitor/conveyancer or HMRC.
