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Applying for an expat mortgage

Living abroad is the aspiration for many Brits and there are almost four million currently residing overseas, according to the latest Office for National Statistics (ONS) survey.

Despite living in another country, many buyers prefer to keep a property in the UK and rent it out but are unaware that the application involved can be more complicated than a standard residential mortgage.

For one, when applying for a mortgage as an expat, you will face tougher identity checks in a stricter market.

Such as?

Lenders will want to know that you are who you say you are, much like any other type of mortgage. They are, however, much stricter in their checks.

There’s a chance that they may want to meet you in person when you’re applying, whether that means you flying back to Britain or them sending a representative out to meet you (which only some do).

There are also fewer lenders that offer expat mortgages and you will likely have to use a specialist rather than a high-street lender, so using a broker that has access to a wide market is important.

And with it being a specialist product, expat mortgages can sometimes have higher interest rates than regular mortgages, with many requiring approximately 25% of the property value as a deposit.  

What about where I live? Does that matter?

It could do. Most lenders have a set list of countries that they will lend to.

But, if you live somewhere where money laundering or corruption is rife, then you may face more difficulties.

Don’t panic, though.

Lenders will do employment references to check your residency and, if you’re self-employed, they will look for you to use a nationally recognised accountancy.

Will the exchange rate affect my application?

If you’re paid in the currency of the country that you’re living in, then yes it will.

Each lender will look at it differently, but a general rule of thumb is that they will shave off approximately 25% of the exchange rate at the time of application to protect themselves, and you.

However, if you’re planning on obtaining a buy-to-let mortgage, then your potential rental income will be added into the mix.

If you’re thinking about getting an expat mortgage, speak to an adviser who will look at a wide range of lenders to find you the right mortgage for you circumstances.