Expats living abroad often look at buy-to-let property options as an investment, a commercial project, or as a holiday home.
Revolution Brokers also work with expats living abroad and seeking a mortgage in the UK.
There are restrictions and complications around borrowing in the UK while residing abroad, so we have created the below guideline to help.
UK BTL mortgages for expats
If you are a UK expat living abroad, you can obtain a buy-to-let mortgage, although the application will be somewhat different from residential applicants.
Lenders need to work harder to establish your affordability if you live outside of the UK. There are also higher risks associated with their lending, and you may have less readily available credit information to provide them with.
Revolution Brokers work with expats looking for UK mortgages for any number of purposes. Our specialist lenders are experienced in this type of lending and can extend competitive offers.
Securing a BTL landlord mortgage as an expat
Some expats retain their UK property, or expand their property portfolio, and conduct a rental business as a landlord from their base overseas.
Here are a few tips that will help you secure a buy-to-let mortgage as an overseas landlord:
- Using an independent broker.
A broker has access to the full spectrum of the UK market and can walk you through all of the stages of your mortgage application, whether you are an experienced investor or a first-time buyer.
Using a UK broker is even more essential if you are based abroad, as this makes the search process quicker and more straightforward with a local broker on the ground to do the legwork for you.
You will also find this a convenient way to save time by avoiding applying to unsuitable lenders and to secure competitive interest rates by being able to compare all of the rates on the market.
One of the most common reasons lenders find it difficult to lend to expats is that they need to have evidence of your income to be able to complete an affordability assessment.
If you are self-employed, whether in the UK or overseas, you will need to have copies of your accounts available. If you run an overseas business, an accountant with an internationally accepted accreditation can help with this.
Some lenders will struggle to accept an application that ends when the applicant is over the age of 70. You can avoid this issue by considering your age when the loan term will end, and adjusting your mortgage application to finish before this date.
There are, however, specialist lenders who will consider applications from later-life borrowers. If this applies, give Revolution Brokers a call, and we will advise on the most suitable mortgage lenders for you.
Your credit file is an essential factor since a lender will need to establish whether you are creditworthy. This can be tricky for expats since you are unlikely to have had any UK finance history for some time.
If you have a UK credit card, for example, this can help prospective lenders assess your good standing with credit providers.
Expat BTL mortgages with adverse credit
While fewer lenders will consider an expat buy-to-let mortgage application from somebody with an adverse credit file, there are still lenders who will be happy to lend.
This all depends on the value of the property, your security and the amount of deposit you can offer.
If you are looking to invest in a UK property as an expat and have a bad credit rating, give Revolution Brokers a call on 0330 304 3040, and we will help find the best way forward.
BTL mortgages for expats on interest-only
It is highly unusual for an expat buy-to-let mortgage to be issued on an interest-only basis. This is because an expat mortgage is already riskier than most other types of mortgage, and your lender might find that the risk profile on an interest-only basis is too high.
There can be circumstances where this is possible, although it will depend on having an excellent credit rating and a high-value deposit.
Income requirements for expat mortgages
One of the common reasons that expat BTL mortgage applications are rejected is that it can be challenging to demonstrate affordability through income. The minimum annual salary for an expat buy-to-let mortgage is usually at least £25k.
Some lenders will only consider UK income in their affordability assessment - that must be paid into a UK bank account. Others are experienced in expat mortgages and are happy to consider income earned overseas.
Many expat buy-to-let mortgage lenders will have criteria showing from which countries they will consider applications from expat residents, and which currencies of income they will find relevant.
This means that your choice of mortgage provider is also dependent on where you live, how much you earn, and in what currency.
Deposits for expat buy-to-let mortgages
The deposit you require will depend on your lender, how much you wish to borrow, and the value of the property.
Typically, you will need a 25% deposit if you already own a UK property, but a charge will also be taken against the second property.
If you have an extensive property portfolio, this makes it easier to achieve lending. There is more security available, the LTV rate is often lower, and the interest rates more favourable.
Should you be looking for an expat mortgage and not have any UK property, you might be asked to pay a deposit starting at 35% of the value of your new investment property.
Do I need a higher deposit if I am a new expat landlord?
Quite possibly, yes. If you are an established and experienced landlord, this poses a less risky proposition for a lender.
If you are a new expat landlord, then other factors will be considered, such as the growth of the rental market and the projected income achievable from your new property investment.
New expat landlords looking for a UK buy-to-let mortgage are strongly advised to work with a broker to ensure you can obtain the lending you need.
Forms of deposit for an expat BTL mortgage
Most lenders will require a deposit payable from your savings, or released from other equity, to consider your application.
Other lenders will accept applications where the deposit is gifted; this is where the deposit is paid by a third party - usually a family member.
Common sources of deposit include:
- Equity in an existing property.
- Sale proceeds of another property.
- Investments - in the UK or overseas.
- Savings - depending on the country and the currency.
Tips for applying for an expat buy-to-let mortgage
It can feel like a minefield trying to find the right lender for your buy-to-let mortgage, with the added complication of being an expat living overseas.
Our top tips to make the process streamlined are to:
- Use a solicitor who speaks both your local language and English, and is familiar with UK property law.
- Make sure any UK legal representatives are properly registered with the Law Society and are experienced in international real estate.
- Use an independent lawyer.
- Think about insurance - expat buy-to-let insurance is a security for you and maybe required by some lenders.
- Consider whether your payslips or other financial information can be translated, or hire a translator to do this for you.
- Don't rely on online calculators for a definitive answer as to what you can borrow - these can't take into consideration all the details and criteria surrounding an expat buy-to-let mortgage.
How Revolutions Brokers can help with expat buy-to-let mortgages
There are multiple benefits to using an independent broker to help access the best mortgage rates for your investment property, including:
- Support with verifying paperwork and checking documents. Revolution Brokers will help you understand each step of the process, and identify any hidden fees or charges you need to be aware of.
- Help with applications - mortgage applications can require a lot of paperwork, and Revolution Brokers help to streamline the application process to make sure everything is completed thoroughly, correctly, and on time.
Using a broker ensures that you have access to rates and terms not available on the open market, and is the safest way to ensure you are getting the best deal when you are trying to compare different mortgage costs from outside of the UK.
Revolution Brokers work with specialist mortgage providers, and we negotiate rates on your behalf, as well as working with each lender to ensure that your application is accepted smoothly and processed quickly.
For help and advice securing an expat buy-to-let mortgage, give us a call on 0330 304 3040 or drop us a message at firstname.lastname@example.org.