In our continuing series highlighting individuals making an impact globally while living and working in Singapore, Expat Choice caught up with UK Expat Sophie Brown Arc & Co.’s representative for South East Asia to discuss Expat and Foreign National Mortgages.
Expats and foreign national mortgages are a specific type of mortgage that are for British clients who live in another country or people who are not from the UK, but would like to buy a residential property in the UK.
Expat and non foreign national mortgages are not offered by most of the popular mainstream banks and building societies because they are, for reasons such as understanding foreign income sources, legislation, and foreign currency exchange, far more complicated to complete than normal mortgages for properties in the UK.
Furthermore, it is often difficult for lenders to obtain credit history searches for people who live abroad, which causes an added layer of risk to the mortgage underwriting process. This has ultimately meant that specialist assistance is often required to secure a UK mortgage to buy a UK property.
However, not all lenders struggle with these types of applications, and whilst the process can be longer and require more information, it is certainly possible to obtain competitive mortgages in the UK if you live abroad.
This is true also for foreign nationals who are looking to invest in the UK; there may be some additional hurdles to jump through, but some lenders in the UK are hungry for this type of business. So much so, that in the last week we have seen the launch of product aimed at foreign nationals (buying in their personal name rather than through a company) with an interest rate of just a touch over 2% pa. There are specific criteria to qualify for this product so please feel free to get in contact for more information on this.
The amount you can borrow will primarily depend on two factors; the size of the deposit you can put down on the subject property; and the amount of income you can prove you have to support the mortgage.
With regards to deposit, typically lenders want the client to contribute a minimum of 25% of the property purchase price. There are some exceptions to this. For example, a client who is looking to have a home in the UK to move back to and can demonstrate good income (e.g. borrowing 4 times their salary) paid by a multinational employer can achieve a loan with a deposit as low as 10%, albeit at a relatively high interest rate.
With regards to income, if you are buying an investment property, a lender will rely mainly on the rental income achieved, though they will also want some comfort that you have income outside of this in case you go through periods when the property is not rented out. If you are looking to purchase a property to move to, then lenders will rely on your taxable income and will typically lend a maximum of 4 to 4.5 times your gross salary.
In order to achieve the very best rates, there are some factors to consider:
· Being employed is usually looked upon more favourably than being self-employed.
· Whilst not essential, having a UK credit history will give access to more lenders, which will result in more competitive pricing.
· Similarly, the bigger the deposit, the more lenders are available and the better the rate that can be achieved.
Ultimately, one of the best ways to improve your chances of success, and to get the better rates and conditions, is to speak to a specialist mortgage broker who has experience with expats and Foreign nationals.
With offices in the UK, France, Switzerland and Singapore, Arc & Co are perfectly positioned you guide you through the process..
To find out more about how we can help, contact Sophie on the details below:
Sophie Brown
t. +65 9018 3727 Singapore Tel. & WA
t. +44 7932 085 670 UK Tel. & WA
Exclusive: Expat & Overseas Resident UK Buy To Let Mortgages
Following on from my article on UK Buy To Let Mortgages I wanted to let you know about a new product that has just been launched and is exclusive to just 10 brokers and Arc & Co. are privileged to be one of those brokers.
Interest rate of 2.59% up to 60% Loan to Value
Interest rate of 3.09% up to 75% Loan to Value
- No overpayment charges
- No early repayment charges
Interest only or capital repayment
- Lender fee of £1,800 for purchases, no fee for re-mortgages plus broker fee
- Available to overseas residents both UK expats and foreign nationals
Properties in England, Scotland and Wales
(Subject to any restrictions or sanctions imposed by international law and lenders terms & conditions)
Please do let me know if there is anything we can help you with,
Have a great week,
Sophie [email protected]
