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Are you looking to make the United Kingdom your home or maybe you want to invest in a property in the UK? You may be wondering if you will qualify for a mortgage as a non-UK resident.

There may be a few questions that you want to be answered, you may be thinking if it is harder for you as an expat to get mortgages in the UK? What is an expat mortgage? How much of a deposit do I need to get on the property ladder?

Let's dive in.

What is an Expat Mortgage?

An Expat Mortgage is a ‘mortgage that you take out on a property while you are a non-UK citizen. It differs from an overseas mortgage, which is where you would take out a mortgage for a property that’s not in the UK but overseas’ according to Damian Porter.

You can avail of an Expat Mortgage through specialist Expat Mortgage brokers in the UK. These brokers are experts in conducting credit searches on citizens of other countries.

 There may also be a possibility that you would be able to take out a mortgage with a regular lender depending on whether you have good financial history and if you have been living in the UK for some time. 

Another option would be to take out a mortgage with the UK brand of the bank you would use in your home country, this may make the process run more smoothly and can be an easier option. 

Although there are two types of Expat Mortgage regardless of which option you choose:

1.   Mortgage on a main residence

This a standard mortgage on a property that your family wants to make their permanent home.  This type of mortgage is available on either repayment or interest-only basis.

2.  Buy-to-let mortgage

This mortgage is for Expats who want to invest in a property. BTL is when you purchase a property with the intention to rent it out to tenants. For example, student housing or city center flats are popular in investments due to the turnover of tenants in these areas.

If you are thinking about applying for an Expat Mortgage, speak to an Expat Specialist who can increase your chances of approval and help you make sure you get the best interest rate. They might even help with paperwork! Try Mortgage Propeller to start your journey online.

Overseas income and credit rating

If the majority of your income is earned outside of the UK, then this may cause some issues for the lender on various levels.

The sustainability of your income is taken into consideration, and the actual size is harder to make sure of due to the fluctuation of exchange rates. The mortgage provider may also have trouble identifying your employer if you are based outside of the UK.

It is challenging to get a hold of all the relevant information, especially when you are seeking it from outside the UK. The risk of fraud comes along with this, and it can lead to lenders refusing Expats or instead charging higher rates given the circumstances. 

It may be difficult to find your credit history too if you have lived outside of the UK for some time. Your credit history is important to a mortgage lender as it allows them to see how viable a candidate you are for borrowing money. Not being able to get hold of this information doesn’t make you a bad candidate as an Expat but it does stick with the lenders as a caution. 

Buying property in the UK from overseas

Anyone can apply for an Expat mortgage living outside of the UK, but there are different requirements when obtaining a standard mortgage as a resident.

You’ll need:

  • Proof of a job in the UK 
  • Proof of earnings from an internationally recognized accountant if self-employed
  • Have a clean credit history 
  • Mortgage terms 
  • Most lenders prefer Expat buyers to hold a UK bank account, and some make it a condition of the mortgage.

What are the interest rates for Expat Mortgages?

Interest rates and fees for Expats seeking a mortgage in the UK are still higher than for borrowers who are residents in the UK. This is because the application for a mortgage as an Expat is more time-consuming, and the fact that it is considered higher risk. 

Although this might be the case, the difference isn’t too big. Expats can now ‘expect to pay rates similar to UK limited company applicants – which have also come down by a large amount over the last couple of years due to increased lender competition’, according to the property hub

What to expect from the application process?

It is important for Expats to understand the application process before going ahead, it is essential that they know that the process is lengthy, and it may take a while to be confirmed. 

When applying for a mortgage as an Expat you will be required to put down a deposit of at least 20%, the larger the deposit the larger amount you should be able to borrow. 

It is normal for some checks to take a while longer than usual, as the lender is not going to be familiar with the documents issued overseas. Therefore, it will take longer to go through them and as a result longer for the mortgage to be confirmed.  

The time difference may have an impact too, as different time zones mean that communication can be harder and again this can have an impact on the mortgage to be confirmed. 

You should be able to complete the process from wherever you are in the world, which is super convenient. You can also work along with a solicitor and a mortgage broker based in the UK without meeting them face-to-face, just if you have an acceptable certified ID.

Your mortgage deed if accepted will require a signature, but you can print this out and post it back to the UK. 

Want some more advice on Expat mortgages? Connect with an FCA-approved Mortgage Expert via Mortgage Propeller! Get started here.

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