Head of Content
Mortgage Advisor & Director
Expat mortgages - why is it a challenge?
It can be challenging for expats living in the UK as lenders perceive you as higher risk borrowers. There are, however, plenty of specialist providers who accept expat mortgage applications, and our advisors at Teito can help.
Living overseas for extended periods will mean that you have not built up a credit history in the UK, and your credit record abroad is not necessarily traceable.
The lack of a consistent credit history adds additional risk in the eyes of the lender, and some may refuse to lend while others will increase rates to mitigate some of this risk.
A poor credit record is then compounded by having an income earned overseas. Again, this introduces additional risk for lenders in that exchange rate fluctuations mean the value of the income is potentially subject to change. Lenders may also struggle to identify your employer abroad.
Remortgaging your UK home
If you have retained your UK home, whether you are planning a return or not, you will likely need to arrange a remortgage at some point. Your lender will be concerned about whether your property is fully insured; make sure to check your terms regarding how long your property can be left empty. If you are looking to let your property out, your lender should grant you a 'consent to let' on your existing mortgage.
If you are looking to invest
As an expat you may be interested in investing in the UK property market. If you haven't invested in the country you are living and still want to retain property as an investment, the UK is a great option.
The UK rental market is buoyant, you may have family in the UK who can keep an eye on the property, and you know you have a base in the UK should you decide to return.
A few tips for expats:
There are a few steps you can take to improve your chances of getting the best rate possible on your expat mortgage:
- If you are a business owner overseas, get your business accounts verified by UK-based accountants.
- Lenders will like you to have family nearby to keep an eye on an empty property.
- Assume a lower income for affordability calculations - lenders can take off 25% to account for currency fluctuations.
- For remortgages - check your insurance policy to see how long your house can be left unattended.
- Expect to go through additional identity checks.
- Don't compare the rates your UK based peers are getting on their mortgage - expat rates are generally >1.5% higher.
- You may need to meet your lender face to face, so expect a trip back to the UK.
Where can I find help?
As the whole-of-market mortgage advisors, our team at Teito can help you get started with securing a mortgage as an expat. Start comparing deals now to begin the process and see how we'll make it easy for you!
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.
