Ex Pat mortgage – buy to let or second home solutions
The Ex Pat mortgage products often evoke a plethora of questions so I have picked on some of the more regular ones and provided a frequently asked questions summary before which will hopefully aid you if are looking to remortgage in the UK.
Q: What is a definition of an Ex Pat mortgage?
A: The standard lending position is a British National that is now living abroad. However, there are Mortgage Lenders that may also include European Nationals who lived and worked in the UK for a while before moving back abroad.
Q: Are you able to stay in the property when you visit the UK?
A: It will depend on the Mortgage Lender but normally there will be a limit to less than half the year.
Q: What happens if my base is outside of the Europe?
A: Sanctioned countries are usually not allowed but there are Mortgage Lenders to cater for the rest of world.
Q: What happens if I’m paid in a different currency?
A: The Mortgage Lender will use a currency exchange factor tool. In addition they will have a buffer in their affordability assessment to allow for fluctuations. This margin is may be smaller for EU Nationals.
Q: Are there Ex Pat mortgage lenders for applicants who work for small employers?
A: Ideally, the Mortgage Lender would prefer you to be employed by a Corporation with branches in different countries including the UK. However, smaller employers without a UK presence will be considered.
Q: Are there Ex Pat mortgage lenders for applicants who are self-employed?
A: In terms of Self Employed or Contractors Accounts will be needed for at least the last 2 years. The Accountant normally must have international acclaim and qualifications. Exceptions may be possible if a large UK Chartered or Certified accountancy firm is willing to audit and approve them.
Q: How can I prove where I live as my employed pays for my accommodation?
A: The Mortgage Lender will typically ask for postal bank or credit card statements showing your current address if utility bills are not available. A Drivers licence may also be requested. Ultimately, if no documentation is available to evidence your address then a letter from your employer (if they are large international firm) may suffice.
To authenticate documents Mortgage Lenders will ask either a Notary, Mortgage Broker or Solicitor to provide certification that they seen the original.
Q: What is the minimum deposit you need for an Ex Pat mortgage?
A: This is typically 25% to 30%.
Q: Are the Ex Pat mortgage rates higher than standard ones?
A: Yes, there is a margin for the additional risk. That said there are an increasing number of Mortgage Lenders in this space which forces them to be competitive.
Q: How can I work out how much I can borrow on an Ex Pat buy-to-let?
A: If the property is to be let the rental coverage assessment is typically 145% @ 5.50%. However, there are Mortgage Lenders that will allow less and also factor in surplus earned income.
Q: How can I work out how much I can borrow on second home in the UK?
A: As a guide the borrowing would be limited to 4 times income to cover the combined mortgage balances of all residentials.
Niche Advice offers appropriate advice on Ex Pat mortgage products. For more information please complete the Contact Form on this website or call T: 020 7993 2044.
Author: Payam Azadi
Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines.