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Mortgage assessments, in essence, are based on risk. Lenders need to ensure they lend to applicants who can afford the loan and avoid falling into a repossession scenario.
This factor is the core reason it can be tricky to find a mortgage as an expat. Issues such as currency fluctuations, economic uncertainty, and the lack of an international credit rating system make it hard for lenders to assess expat mortgage eligibility.
However, several lenders offer expat mortgages products, so the key is to work with an experienced broker who can recommend the right specialist lenders to apply to.
How Much Can I Borrow on an Expat Mortgage?
Lenders need to understand how much you earn and the deposit available before deciding on a maximum borrowing amount.
For UK residents, mortgages are normally capped at between four and five times their annual income, but this assessment also relies on several other variables, such as:
- Employment stability
- Other debts and obligations
- Financial dependents
- Credit history checks
As an expat, proving your annual income can be a slight hurdle, but we’ll come onto that shortly!
What Loan to Values are Available on Expat Mortgages?
Loan to Value (or LTV) indicates the amount you’re borrowing on a mortgage as a percentage of the property value.
Although there are mortgage products up to 95% LTV, it’s less likely you’ll be able to offer this low a deposit since the lender needs to offset the higher risk factor of lending to an overseas expat.
You will also need to go through due diligence checks, important as lenders must comply with anti-money laundering regulations and verify where your deposit capital comes from.
Therefore, if you can keep records to hand of any lump sums you receive, you can quickly provide your deposit source, whether that’s from an inheritance, investment or property sale.
How Do I Prove My Earnings for an Expat Mortgage?
It’s easier to demonstrate your income if you are employed – self-employed applicants normally need to provide trading accounts, tax returns or bank statements to evidence their average earnings.
Some lenders will only consider income originating in the UK or paid to a British bank account, although that isn’t always necessary.
Earnings or salaries received in US Dollars, Euros and GBP are widely accepted. Still, you can use wages in Yen, Yuan, Riyals and Dirham if you apply to a flexible lender who is happy to consider the application.
How Can I Improve My Chances of Applying for an Expat Mortgage Successfully?
One of the best ways to boost your approval prospects is to maintain a credit history in the UK.
Although you’re unlikely to have a strong UK credit rating if you live elsewhere, a small credit card repayment each month may be enough to show responsible financial management.
Another option is to keep some financial link with the UK, even if using your parent’s address as your place of residence in Britain.
Most expats start with the high street banks or mainstream lenders they recognize, but this isn’t usually the best option as an expat since these providers have rigorous policies and are less likely to help.
Lenders will make decisions based on the information provided, so anything you can produce that proves your earnings, your deposit or anticipated income can be useful.
There is no international credit check for a mortgage provider to turn to.
Expert Support Applying for an Expat Mortgage
Mortgages for expats aren’t standard products, so it’s very likely you will be more successful if you apply for an expat mortgage through a broker who can direct your application to the most appropriate lender.
You will probably also find that high street lenders have strict policies about who they will lend to, so you normally need to be a permanent resident or a citizen in another country without much risk that you intend to relocate.
Expat lenders will ask:
- Whether you have lived in the UK or another country for more than three years.
- If you have a British bank account or permanent home in the UK.
- How you earn your income and in which country and currency.
If you have a temporary work visa or another form of short-term permission to live abroad, a UK lender often won’t lend because they don’t have any assurance of stability or that you won’t leave again at some point.
How Can a Broker Help Me Find a Great Expat Mortgage?
Many expats find it hard to apply for mortgages through the usual routes since niche lenders don’t tend to advertise on price comparison sites, and banks don’t often provide such specialist mortgages.
Our mortgage brokers provide customized advice, connections with an extensive network of lenders, and guidance to ensure you direct your mortgage application to the most suitable provider.
Please get in touch on 0330 304 3040 or via email at info@revolutionbrokers.co.uk for more information about UK expat mortgages or to get your application started.
