An ex-pat is a British national but is currently living or earning overseas.

If you possess these characteristics, you must approach a mortgage lender. However, approaching such lenders directly can be a challenge. This is where Care Finacial Services can help; with our dedicated team of mortgage brokers who have access to a range of ex-pat mortgage products, we can effectively work around any obstacle you might be facing, such as foreign income and complex income structures and overseas employment statuses. Despite the UK mortgage system is very complex, the current situation of foreign currency against the pound can be of benefit to an individual looking to invest.

How can a UK ex-pat mortgage be obtained?

An ex-pat mortgage process can be quite complicated. That is why people tend to hire mortgage brokers. Many high-street brokers don’t offer ex-pat services because they do not have the facilities to search credit background checks on clients living outside of the UK. This is where specialists like Care Finacial Services can help. We have a variety of specialist ex-pat brokers who have direct access to UK lenders and won’t be put off by an applicant’s ex-pat status. We will be able to advise you about:

• The time frame of the process
• The best ex-pat deals, fees, and rates available
• What documents will be required to meet the ex-pat criteria
• If you are eligible or not to be accepted by a lender for a UK property

The factors may vary from client to client depending on their credit background, but hiring a specialist will make the process much quicker and easier.

How much can be borrowed and the deposit rates on a UK ex-pat mortgage?

Realistically, lenders will not lend any applicant more than they can afford based on their earnings and financial commitments. An applicant’s credit history may also affect their borrowing power and the amount of deposit an applicant can afford to pay. Most lenders allow applicants to borrow up to 4.5-6 times their income; however, if someone is planning to buy with someone else, then the borrowing power maybe 3.5 of the total income of both applicants combined. The lender’s amount may differ from client to client based on their income status. The maximum amount that can be borrowed is 75-80% of the property value, so the applicant will have to have at least a 20-25% deposit available.

Both buy-to-let and residential mortgages require a 25% deposit, but if the applicant has a good credit background, then the lenders may also accept a 10-20% deposit. If an applicant does not have a desirable circumstance and can not afford a 25% deposit, they will need to see a specialist who will guide them to a lender that can not be found on the high street.

The most attractive deals are directly proportional to large deposits.

Is a good UK credit history needed to obtain an ex-pat mortgage deal?

If you have been residing abroad for a certain period and have not been able to manage your UK credit history, this does not mean you are not eligible for an ex-pat deal. Yes, indeed, a good UK credit history will give you an upper hand in the application process; however if you can satisfy the following criteria, then it should still work out:

• A healthy bank statement (for at least 3 months) without overspending and drafts.
• On-time paid utility and phone bills even if they are addressed to your overseas residence.
• Credit card statements should be paid on time with proof of payments
• 3 months statements of any personal loans or car finances along with repayment proofs

What are the application criteria for a UK ex-pat mortgage?

As established above, an overseas resident can obtain a UK ex-pat mortgage, but several requirements must be fulfilled. A very important factor is the country you currently live in, which may affect the application process. Unfortunately, some countries possess high risk, and most lenders don’t accept such countries. Some of these countries include African and European countries and Australia, for which lenders have stricter policies. On the other hand, lenders can be much more lenient towards countries like the USA, Singapore, and Dubai.

The following is a list of requirements that will need to be met to fulfil the application criteria:

• 3 months’ worth of bank statements for every bank account an applicant may have
• 3 months of proof of any deposits, transactions, or transfers that may have been made
• Residence proof (overseas address)
• A good credit score with a traceable credit history
• An applicant’s earnings should be more than required in the UK- lenders tend to keep a check on the currency fluctuations, so you will need to earn 10-20% more to qualify for affordability.

What documents are required for an ex-pat mortgage?

The documentation required may vary according to your circumstances and how far back the lender needs a record. Either way, you should be prepared to provide the following documents:

Proof of identity:

• Passport
• Drivers license (overseas and UK license both)
• Residency card

Proof of Address:

• Utility bills for the overseas residence
• Bank statements that may have been sent to this address
• If your employer manages your bills and accommodation, the hired broker will provide you with a letter template that the lender may require.

Proof of income:

• A copy of your CV
• An employers letter along with copies of bank statements and payslips
• Printouts of any online statements with the URL of the page
• Copy of the job contract
• Evidence of any bonus payments you might have received
• If you are self-employed, then the lender will require the business accounts, and the business must be certified by an internationally recognized accountancy firm

Financial history:

• Records of any international income and expenditure
• Credit card statements and their current balance are available
• Records of any personal loans
• Records of any financial agreements, if any
• If the applicant owns any property, the lender will require a list of all the properties owned along with their mortgage costs and rental incomes.

Proof of your mortgage deposit:

You should have a healthy record of your bank statements which should go back at least 3-6 months.

Expat Mortgage: Lenders or brokers?

A common confusion ex-pats face while looking for property deals in the UK is that they should speak to a lender first or a broker. Ultimately, you will be talking to a lender, but finding and deciding which lender to work with can be tricky. Finding the most suitable lender can be difficult because they are too niche to be compared broadly based on standard mortgages such as interest rates, fees, and terms. To compare lenders effectively, you would have to go to each one individually and explain your situation, which can be a prolonged process; this is where brokers come in handy.

At Care Finacial Services, our brokers can secure ex-pat deals and loans daily. We know the best rates and discounts available in the market, alongside a list of the specialities of each lender. We can help you with all circumstances, from complex applications to quick turnarounds and anything in between.

Expat mortgages for applicants returning to the UK:

Many ex-pats that live and work overseas tend to return to the UK within a few years and are often looking to buy property in the UK. However, it can be difficult for new returns to get finance from a UK mortgage lender. One of the main hurdles you might face is your income. It can be difficult for someone earning in foreign currency while applying for a UK ex-pat or relocating between an existing foreign job.

It is not typical for a local British ex-pat to struggle with getting a mortgage because of their income status; that is why traditional lenders do not have the expertise to deal with such issues. One of the biggest failures of conventional lenders is that they cannot deal with complex income streams.

At C4M, we work with several specialist lenders who have experience dealing with ex-pats with complex income structures. Hence, with C4M, even if you have multiple income streams or a complicated income stream, we can still help you obtain an ex-pat mortgage that you can afford.

UK Ex-pat Remortgages:

Remortgaging can be a time-consuming and draining process but can also be very rewarding once it is secured. Remortgaging can lead to many benefits, but getting the right deals and advice may cost you, especially if you currently live abroad.

Many ex-pats want to develop their property portfolio or buy a holiday house. For this, they may need to remortgage an existing property to gain the equity required for the deposit, alongside an additional ex-pat mortgage to finance the new property. Another cause may be that you want to remortgage your UK property to make equity for overseas. In both scenarios, you will need an experienced lender to deal with such an ex-pat status.

UK ex-pat Buy-to-let (BTL) mortgages:

This type of mortgage is when you purchase a specific property to rent it out. Student houses and flats in the city centers are intelligent investments because of the high turnover of tenants in such areas.

However, most UK mortgage lenders don’t accept non-UK residents for BTL mortgages. This is because BTL mortgages are more complicated and expensive for banks to handle, but getting a good deal through a specialist lender with a 20% deposit requirement is still possible. It should be noted that an interest-only requirement deal on a BTL mortgage is not very favorable to lenders. Still, if you possess a good credit history and can put forward a large deposit amount, then a specialist broker will be able to help you find the perfect deal.

Top property locations in the UK for ex-pats:

If you are planning to purchase property in the UK, one of the most difficult decisions can be choosing where to buy. After the economic recovery from COVID’19, the property market has become favorable toward property investors. Throughout 2021 property prices have increased by 9.8%, and the average value of properties has gone up to £280,921. This has resulted in a greater return on investment for ex-pats looking to invest in buy-to-let (BTL) property’s in 2022.

The pandemic lockdown period has allowed many to value outdoor areas and more home space, increasing property prices. When buying a property, specifically a BLT, ex-pats usually determine how much rental yield the property can generate.

Rental yield is usually based on the annual percentage of the property value. For instance, if a property is worth £400,000 and generates £20,000 per year in rent, the yearly rental yield would be 5%. Based on rental income, rent percentages have increased by 8.6% across the UK. This is primarily because of young workers who have returned to the cities to return to the office as the COVID restrictions ease. London rents are increasing slower than in other cities, while in areas such as Bristol, Glasgow, and Nottingham, rental rates have increased by 10% compared to pre-pandemic times.

UK expat mortgages for people earning in foreign currencies:

Securing an expat mortgage deal cannot be easy if you make it overseas. One of the main reasons is that foreign income streams can be complex for banks to handle because of the following reasons:

• Fluctuation can pose an issue in your ability to repay your mortgage.
• It could be difficult for the lender to track your employer and income stream.
• If income is coming through a foreign source, it could pose a risk of money laundering.
• If you live overseas, you could have an untraceable credit rating.

These factors decrease the chances of any bank lending you money and make the overall process much more expensive.

However, if you earn in foreign currency, that does not mean a mortgage am not be obtained. You must fulfill your application criteria correctly and have all the proper documentation available.

Applying for a joint UK mortgage with a Non-UK national partner:

The most common cause in this scenario is couples where one partner is a UK national while the other is not and are keen on making a home in Britain. In such cases, it can be challenging to get a mortgage, as lenders are likely to reject the application solely based on the case’s complexity.

At C4M, we can find the right lender who can still get you the finances in such a case. The following are mortgage finances for mixed national couples:

• In cases where one partner doesn’t have a permanent residence in the UK, property finances can be sourced for up to 70% of the property value, but only on a capital & interest replacement basis.
• For clients in tier 1 general visas, lending can be accessed for up to 90% of the property value

Three common causes have been seen, one of which is for European citizens living in the UK; a UK mortgage can be secured if:

• You have been living in the EU for over 3 years
• You have a UK bank account
• You have a permanent UK job

The second case is where you are from outside of Europe but are currently living in the UK; then a mortgage can be secured if:

• You have been living in the UK for over 2 years
• You have a permeated UK job
• You have residence rights in the UK
• You have a UK bank account

Thirdly, if you are a citizen of a different county and live outside of the UK but are buying property here, you should speak to a specialist mortgage broker from C4M.

Countries where we can help UK expats; high and low-risk countries:

As a UK expat, the country you currently live in can significantly impact your mortgage application process. It is important to approach the right lender, who can help you effectively with the right mortgage deals, terms, and fees. The country you reside in is a very important factor for many reasons. Firstly, earning in a foreign currency can pose an administrative burden on the lender. Secondly, foreign currencies can be more difficult for UK banks to verify and pose a risk for money laundering. This may result in a more costly mortgage process.

Many lenders are much more lenient with expats from countries such as USA and UAE and offer several great deals to choose from. However, for countries that are not on the International Financial Action Task Force (FATF), banks are reluctant to lend to such expats as these countries have a high ratio of money laundering and terrorist financing cases.