If youâ€™re an expat looking for a UK mortgage, youâ€™ll now have extra choice but the process is more complicated than before.
Buy-to-let investments are still favourites amongst the British expat community, with a wider choice of products now available and two new building societies on the list. Even so, available loan options are still restricted and the majority of applicants will need to go for a specialist landlord mortgage. New kids on the block Tipton and Coseley Building Society and the Cambridge Building Society are now offering a range of buy-to-let loans specifically aimed at British expats living overseas.
Some five million Brits are estimated to be living outside the home country, with interest in property investment still high. For those wanting to buy a residential property against their eventual return to the UK, standard residential mortgages are still available bit are tricky to get. If the property is to be occupied pending the ownerâ€™s return, proof is needed that only close family are in occupation, thus making a buy-to-let deal the best way forward. For â€˜landlordâ€™ mortgages, specialist lenders are the only option and are made more complicated by tighter lending rules and time differences between the home country and that of the expat applicant.
Lenders prefer applicants to be working in multinational companies, with the minimum salary set at Â£25,000. Deposits of 25 per cent are commonly required and interest rates are higher than on standard mortgages. Even more problems can be caused by the 2016 European Mortgage Credit Directive, as the new law insists applicants being paid in foreign currency are closely scrutinised. In addition, the underwriting process looks closely at the applicantâ€™s overall financial position as well as taking account of currency fluctuations over the length of the loan.
Expats on regular salaries stand a better chance of being granted a mortgage, with a number of lenders actively barring the self-employed. ID checks have been ramped up, with passports needing to be certified by diplomats, international lawyers or accountants, and expatsâ€™ countries of residence also play a part in lendersâ€™ decisions. A number of countries are on lendersâ€™ restrictions lists, including several in Eastern Europe and Africa as well as states subject to sanctions and those having a reputation for weak regulations.