Find the best expat mortgages
Taking on a mortgage as an expat living in the UK presents some additional challenges. However, these don’t prevent expats from buying a home, remortgaging, or investing in a buy to let UK property.
Why are expat mortgages difficult?
Whether you can get expat mortgages or not essentially comes down to risk assessment. Mortgage providers are always on the lookout for anything that raises the risks of them losing money. A borrower who earns their money abroad, or whose employment details are hard to access, represents a potential risk for the mortgage provider.
Credit ratings are another area where mortgage providers can struggle to find an expat’s information. If an expat credit history is primarily accrued overseas, then the mortgage provider can’t factor it into their risk assessment. Most lenders will err on the side of caution and will be less keen to lend if they can’t check a borrower’s credit history.
Paying expat mortgages with overseas income
One barrier to expat mortgages is the uncertainty created when income is earned in another currency. Exchange rate fluctuations can have an enormous impact on the sterling value of an expat’s income. This will lead mortgage providers to adjust income accordingly and can significantly reduce the buying power of the expat’s money. This is something that expats must account for when seeking to purchase UK real estate.
Does this restrict the type of expat mortgages available?
Expats can still take on all sorts of mortgages, but they typically become more expensive. If a mortgage provider feels that expats represent a greater risk, then they will compensate by adjusting their lending criteria. This might mean that expats will need a higher deposit or will be subject to a higher interest rate.
Expats can still invest in buy to let mortgages, although these will typically require an even higher level of deposit and come with a higher interest rate too. Be aware that recent changes to the buy-to-let market have made it even more difficult to make a profit from renting out property, with expat mortgage lenders under strict instructions from the FCA to require high deposits.
Finding the right expat mortgages
The UK mortgage market is incredibly diverse, and there are specialist lenders for any conceivable application. It can be wise to find a specialist expat mortgage provider. In many cases these will be lenders with overseas links that can verify an expat’s employment status and credit history. This can make it cheaper overall, although smaller, specialized lenders may not be as adaptable as large mortgage providers. You can find these lenders online, or by contacting a specialist mortgage broker.
Buying UK property as an expat from overseas
Real estate in the UK is still one of the best investments you can make. There’s no reason why expats can’t benefit from purchasing UK property. Be sure to speak with a specialist expat mortgage broker before committing to a mortgage product, to ensure it’s right for your situation.