A “proper” cup of tea - you can’t get it anywhere else in the world! However long you’ve been living abroad, sometimes the call home is hard to resist. But where will you make your first cup of tea when you finally return? Let’s look at some issues facing expats looking for mortgages in the UK, and ways to overcome them.
Mortgage challenges for expats returning to the UK
Unfortunately, securing a mortgage in the UK as an expat can be challenging - most high street lenders and banks aren’t open to expat mortgages - but it isn’t impossible.
There are a small number of lenders who specialise in expat mortgages, but you will probably be subject to higher interest rates, and in most cases, you will need to put down a larger percentage of the sales price as a deposit. Also, due to strict international money laundering laws, the deposit must come from your savings or equity - it can’t be a gift from friends or family. Finally, if you haven’t maintained a credit history while away, proving your creditworthiness can be an additional burden.
Understanding mortgage options for expats
Lenders who provide expat mortgages usually offer between 3.5 and 6 times your total annual income. The amount of your mortgage, however, also depends on your employment history, other current debts, your UK credit history, and other similar factors.
In rare cases, a specialist expat mortgage adviser may be able to qualify you as a resident, but only if you have a substantial deposit, income over £100,000, and have maintained significant, provable ties to the UK while you have been living abroad (such as constant travel to the UK while away).
Key considerations for returning expats
As you enter the mortgage process as an expat, expect the journey to be stricter than applying as a UK resident. Lenders view expat mortgages as higher risk, hence the larger deposit requirement of 25%. Not having a UK address can complicate matters further, and bear in mind that some expat mortgage lenders require a UK residency period after you return home before they will offer you the loan.
If you were self-employed abroad, have an international accountant prepare proof of income documentation before you start, to avoid delays. Expats who work for a global company may have an easier time proving income, but some lenders require evidence of income deposited into a UK bank.
