We are often contacted by clients who are either British nationals living abroad – more commonly known as ‘expats’ – that are looking for property finance or a mortgage for a UK based property. Though this may on first glance seem like a complex process, with One 77 it is a relatively straightforward procedure.
Expatriates (expats) are UK nationals who either live or work abroad. Obtaining a mortgage or property finance as an expat needn’t be the headache one would first assume. The process is not a difficult one for an experienced mortgage adviser or specialist finance professional even though there are slight differences to the process to what one would consider a conventional mortgage for a UK based individual. The main difference is the more stringent focus from financial security regulations on elements such as where you currently live and your source of income or evidence of earnings.
Since 2016* lenders are required to make more comprehensive and extensive ‘due diligence’ checks on all mortgage applications, and in particular those from non-UK resident borrowers. What this roughly translates to is an increase in the amount of documentation we will require from you. This can include, but is not limited to:
- 6 months or more bank statements (as opposed to 3 for UK based applications)
- 2 – 3 years tax returns (as opposed to the last 12-24 months for UK based applications)
Your One 77 adviser will be able to work directly with your accountant to obtain the specific details if this is more preferable to you.
Salary payment in a foreign currency
Many UK nationals living or working abroad are often paid in the currency of their resident country. With continuous day-to-day fluctuations in the currency markets this can obviously have an affect on the simplicity of their ability to make regular and consistent repayments, and recent regulation* now requires that any fluctuations are ‘buffered’ into the repayment quotations. You should bear in mind that this is not simply the current rate of exchange, but will also include an allowance for any larger movements in the currency markets.
The underwriting process for cases where currency is a factor will be unique, however more stable and predictable ‘sister’ currencies such as the Euro and the US dollar will often require less rigorous stress tests. Most lenders will take an average exchange rate over the last few years, but a ‘spot exchange rate’ will be the most common method of estimating the currency cover element to your mortgage.
The documentation you will require
Due to the inability of lenders to make checks of your incomings and outgoings against UK sources (credit agencies, electoral register etc.) more comprehensive documentation will be required. Here are a few things to bear in mind:
- The majority of lenders will ask for original paper documentation (bank statements, employment documentation etc.) and will most likely require an original hand-written signature on the application itself.
- You will most likely be required to provide authenticated copies of identification documents.
- Any documents sent in a foreign language will be required to be translated and authenticated as such.
- Authentication must be undertaken by a certified person. The criteria relating to a “certified person” will change from country to country, but your mortgage adviser will be able to clarify this depending on your place of residence.
Specific requirements will vary from lender to lender and your One 77 adviser will tell you as soon as possible the required documentation of the specific lender they will be placing you with. However a good starting point will be the following:
- Driving license (preferably, but not exclusively, UK issued if still valid)
- Proof of right to residency and work (e.g. Green card)
- Proof of address
- Proof of income
- Documents relating to your confirmation of home address in your country of residency; utility bills, bank statements listed at that address etc.
- Comprehensive details of you source of funds for any deposit you will be placing.
Please note that this list is not exhaustive and your One 77 adviser will be able to give you the exact requirements dependent on your lender and place of residency.
Your UK credit history
With all mortgage applicants – either based in the UK or abroad – we would always advise that individuals keep on top of their UK based credit history. There are a number of services that can provide this for you and your One 77 adviser will be able to assist you further.
In summary, though there are a number of extra steps and checks that need to be taken when applying for a UK mortgage as an expat, with an experienced One 77 adviser to guide you we aim to make the whole process as smooth as possible.
To speak to an adviser around your UK mortgage, call us today on 01249 474952 or use the contact form below and we will be in touch at a time to suit you.