Expatriate Mortgages
Many UK expatriates find that they need to buy property while they are living overseas, either to give themselves a place to live, or to serve as an investment. If this is the situation you are in, you have a couple of choices when shopping for expatriate mortgages. You can either apply for an expatriate mortgage through a UK lender, or you can apply for an overseas mortgage from a lender in the country where you are living.
Applying with a Local Lender
One benefit of applying with a local lender is the fact that you will not have to travel to Britain to sign documents or apply for the mortgage. If you are far from home, this travel expense becomes significant. For this reason, many expatriates living in exotic locations find it easier to work with a local lender, in spite of the fact that the mortgage itself may be more expensive.
Applying with a UK Lender
Applying with a UK lender also has some advantages and disadvantages. While the mortgage will typically be cheaper, you will have to travel to the UK at some point to secure the loan. You may find that getting a mortgage from a UK lender makes it easier to understand the terms and conditions of the loan, as the loan will have to follow UK lending guidelines, which may not be present in the country where you are living.
Which Choice Is Best?
The answer to this question is not easy. What is best for one expatriate may not be best for another. While these two types of mortgages are extremely different, they both carry benefits and risks.
Getting a mortgage in another European country where you are living and working is probably the cheapest option. However, if you are in Asia or Africa, you may not find this to be the case due to the cost of travel. An independent mortgage broker in the UK can help you determine the best course of action.
You will also find that many of the lenders that are based in the UK are in partnerships with lenders in other countries where Britons tend to live. You may be able to get an overseas mortgage while still using a UK lender. This way you can get the mortgage with a UK lender without having to travel back and forth from your new home to Britain. Obviously there are many mortgage options to choose from when purchasing property overseas. Having a trusted mortgage advisor working with you will make the choice much more clear.
Expatriate Mortgages – UK Citizens Buying in UK
Whether you are an expatriate who has moved to the UK from another country or a UK citizen who is currently living overseas, you may find that you are in need of a mortgage to buy property in the UK. This can be difficult to find, however, because many lenders are unwilling to work around your current living arrangements. Here are some tips you can use when shopping for expatriate mortgages.
UK Citizens Living Overseas, Buying in the UK
If you are a UK expatriate who is looking to buy property in the UK, you have some options. You may wish to use the property as an investment, or you may wish to use it as a home to return to when you are done with your travels. However, you will find that most high street lenders are not willing to work with you while you are out of the country.
First, you will need to decide whether you are going to buy the property to let to tenants, or if you are going to live in it some day. Even if you will let the property before you live in it, it will be considered residential property. However, if you never intend to live in the property yourself, you can apply for a business loan, which is far less restrictive. Otherwise you will need a residential mortgage.
You will also need to decide if you want your mortgage to be onshore or offshore. Either way, there will be tax benefits that you will enjoy. You will need to discuss your current financial situation with your mortgage broker to best decide which option will work for you.
Expatriate mortgages are usually found with specialist lenders, not traditional lenders. Each one will create a unique structure, so it is important to shop around for the best deal for your situation. Using an independent broker will make this easier.
Residential Mortgages for UK Citizens
You will find that as a UK citizen you can usually find a lender willing to offer you a residential mortgage. While there is an increased risk due to your current residence, that risk is counterbalanced by the good financial situation most expatriates enjoy. You will need a good credit rating and a decent amount to put as a down payment on the property. However, if you are self-employed, you will find it difficult to get a mortgage.
Buy to Let Mortgages for UK Citizens
UK citizens living overseas have many choices when shopping for buy to let mortgages. If you are in the market for this type of mortgage, you will want to work with an independent advisor or broker to ensure that you are offered the best choices. Again, being self-employed may make it a little more difficult to get this type of mortgage.
Expatriate Mortgages – Non-UK Citizens Buying in the UK
Expatriate mortgages are not just for UK citizens who are buying property while living overseas. Many foreign nationals come to the UK to live, work, or vacation. If you are a foreign national living in the UK, you may find that you want to purchase property in the country. You can do so, but your choices will depend on how long you have lived in the UK and whether or not you are a citizen of a European Union country.
Options for EU Nationals
Because nationals within the European Union have a credit history that is traceable, they can usually get a residential mortgage in the UK without much trouble. However, this type of mortgage does require a couple of things. First, you will need to have lived within the EU for over three years. You will also need to have a permanent job and bank account within the UK. If you have these qualifications and a decent credit rating, you can apply for a mortgage through a UK lender.
Options for Non-EU Nationals
If you are living in the UK and are not from the European Union, you will not have a credit history that can be traced by a UK lender. This can create problems, but you can still qualify for expatriate mortgages if you meet some basic qualifications. First, you will need to live within the UK for over two years. You will need to have a permanent job and a bank account in the UK. You will also need to have legal rights to live in the UK permanently or a valid UK work permit.
Self-Certification Mortgages
If you need or want to skip some of the qualifications required for non-citizens applying for UK mortgages, you may want to look into a self-certification or non-status mortgage. This type of mortgage requires a 25% or higher deposit on the property, but it allows you to apply for the mortgage with no proof of income. You simply give your word that you will be able to pay back what you owe.
Finding a Lender
Because you will be applying for a non-standard mortgage, you will want to work with an independent mortgage broker when shopping for expatriate mortgages. This will allow you to get a broad picture of what is available throughout the UK mortgage marketplace. The mortgage broker will also be able to give you advice as to which mortgage products are best for your unique financial situation.