The case study below shows a case for an expat mortgage and how we were able to assist them with their finance needs.
In this particular case the client was a resident of Vietnam and had an existing portfolio of 3 properties and was looking to capital raise on an unencumbered property to fund the purchase of further investment properties, to raise the funds required the client needed to take a 5 year fixed interest rate to use the lower stress rate applied to draw the funds from the property. The remortgage for expats application was accepted by the lender and the process ran smoothly, through underwriting and valuation.
Buy to Live OR Buy to Let?
These are the two types of expat mortgages that are available to clients, with Buy to Live being for clients that are working abroad but whose family live in the UK. Some clients believe that they can buy the property for them to live in when they are in the UK and leave it empty when they are abroad. However, this is not the case – as any mortgage company will require buildings insurance to run alongside the mortgage and this would be invalidated if the property is left unoccupied for a period of 30 days or more. Additionally, they can also not let the property whilst they are abroad without the consent of the lender.
Expat Buy to Let Mortgage applications work in the same way as those for UK residents in terms of the rental income and loan to values. With mortgages for British expats the important factors that need to be considered for the client are:
Buy to Live (at time of writing)
- Maximum loan to value is 80%
- Minimum loan as standard is £100,000.
- Lenders have restrictions on which countries they will accept applicants from, typically any country with international sanctions is prohibited.
- When assessing affordability lenders will take a shaving off the client’s income to allow for any fluctuations in the currency exchange rate
- Clients must hold a UK bank account for the mortgage payments
- If documents need to be certified this can be done at a notary public in their country of residence
Buy to Let
- Maximum loan to value is 80%
- Minimum loan as standard is £100,000
- Clients must hold a UK bank account
- Some lenders require the client to have a UK credit footprint to allow for a credit scoring on their system
- First time landlords can have their loan to value restricted, typically to 65% If you have any questioned regarding some of the more detailed criteria applied, we will be more than happy to answer any questions you may have. Please note our fee structure for Expat mortgages is higher than our standard pricing, so a great opportunity to earn higher broker fees for Licensees, but always please check with an Mortgage Advisor before quoting any fees to the client.
If you have any questions relating to a Expatriate Mortgage, contact us today to speak directly with one of our CeMAP certified Mortgage Advisors.
Call us today on +44 1494 622 555. Alternatively, please complete this short online form and an Expat Mortgage Advisor will call you right back.