If you’re like most people, the issue of getting a mortgage from overseas will be top of mind.
In fact, more and more expats are in the same position, all looking to secure the best deal they can find and the field of expat mortgages is expanding.
Expat mortgages are more difficult to get than for those who are based in the UK itself, as there is a perception of a higher risk for the lender. Lenders will often ask for a higher deposit to offset the risk, charge higher interest rates and may look more closely than usual at a detailed credit rating.
There are a few baseline criteria that will impress lenders:
Earning more than £45,000 annually
- Having a 30% deposit to the purchase
- Working for a multi-national corporation
- Being resident in a Financial Action Task Force Country
Despite the challenges which stand in the way, demand is rising year on year for mortgages from overseas. One country which has seen a particular rise in interest is Australia, as British expats there show a desire in keeping a finger in the pie of UK property ownership.
Other statistics indicate that expat locations such as the UAE, Singapore and Hong Kong have helped see an increase in overseas enquiries of 90% since June 2016 when the Brexit referendum took place. The UK market is certainly stirring up interest and if you buy there now, you will be joining a good number of foreign investors who believe that the time is right.
Since 2014, there has been greater regulation of the market and this potentially adds difficulty to finding a deal.
Income and expenditure has to be documented in greater detail, and European rules brought in last year have meant that those paid in a foreign currency are subject to greater caution, with exchange rate fluctuation being taken into account.
One recent survey of the market found that there are over 40 lenders willing to lend to expat investors, so there is plenty of choice out there, provided that the criteria above are largely fulfilled. (If they are not, the choice of mortgages will be more restrictive).
Fundamentally, a BTL mortgage lender will require that the property ‘washes its face’. This means that it typically needs the mortgage repayments to be exceeded by rental income by a factor of 145%, assuming a mortgage rate of 5.5%.
In some cases, lenders will consider slightly varying and lesser amounts, so it pays to have a trusted adviser doing this legwork for you. The key takeaway is that a mortgage is simply not as difficult to get as it may appear: after all, banks make money by lending to customers.
THE APW MORTGAGE DESK
APW has its own Mortgage Desk, and we are there to take the entire process off your hands. This means you don’t have to spend time and money talking to different banks or worrying about finding the best deal.
This also means that a mortgage will present no obstacle in advancing an investment portfolio, and that now is an exceedingly good time to join the club of investors around the world benefitting from a BTL property investment in the UK.