Whether you initially intended to remain overseas permanently or your return to the UK was planned, you may be unsure where you stand regarding mortgage eligibility.
Expat Mortgage when Returning to the UK
Applying for a mortgage after moving back to the UK can be challenging, given how most major banks and lenders will expect you to provide proof of a UK address for at least three consecutive years. Living abroad may also mean having no specific credit history in the UK during the time of your residency overseas. This can make it difficult to verify your financial status and therefore qualify for a mortgage.
UK Property Finance Ltd, work with an extensive network of specialist lenders who take a flexible approach to expat mortgage applications. Even if you have no provable credit history and have not lived at a UK address for several years, you may still qualify for a mortgage.
Mortgage Lender Criteria for Expats
Irrespective of the outcome of Brexit, it is widely expected that a sizeable contingency of expats will make the decision to return to the United Kingdom. Many of whom will be interested in purchasing homes via the usual channels.
If you approach a mainstream bank or lender with a mortgage application as a returning expat, it is possible you may be turned down. High Street banks will almost always scrutinise applicants and their cases based on the following:
- How recently they returned to the UK
- The length of time you spent overseas
- Your ability to provide proof of income
- Evidence of general financial status
- Provable credit history
- Your employment status at the time
- The LTV of the mortgage you need
- The size of the deposit you can offer
- Any credit or financial issues within the past six years
As far as most major lenders are concerned, returning expats represent higher-risk applicants than conventional clients based in the UK.
Will I Qualify for a Mortgage as a Returning Expat?
Take your case directly to a mainstream lender and there is a strong chance you will be rejected, particularly if you have only recently returned to the UK.
Specialist lenders tend to be more flexible and lenient, though it is still advisable to do everything you can to boost the strength of your application. There are several important steps that can be taken to improve your chances of qualifying for a mortgage, including but not limited to the following:
Offer a deposit of at least 25%
Even if it is not strictly necessary to provide a large deposit, doing so could boost your eligibility. It is also worth remembering that larger deposits usually pave the way for more competitive rates of interest and lower overall borrowing costs. Even if this means waiting a little while longer before applying, it could save you a lot of time, effort and money long-term.
Check your UK credit file
You may or may not have any UK credit history to speak of, depending on how long you have been abroad and whether you maintained any accounts back home. It is essential that you carefully check your credit file before applying, as doing so will give you a good idea as to where you stand in the eyes of the lender. If you have poor credit or no credit history whatsoever, you may find it impossible to qualify for a mortgage on the High Street. Your applications should therefore be directed exclusively at specialist lenders – those who welcome both returning expats and individuals with imperfect credit.
Proof of income and financial status
Your eligibility for a mortgage will be determined primarily on the extent to which you can verify your financial status and provide proof of income. Mortgage lenders in general will always seek to establish whether you can comfortably afford the repayments on your mortgage for the duration of the agreement. As it can be more difficult to verify financial status and proof of income when you have lived abroad for several years, you may benefit from expert advice.
Your current and future employment situation
If you return to the United Kingdom as an expat while in strong and stable employment, you have every chance of qualifying for a competitive mortgage. The same also applies if you have secured a good job in the UK, which you have either already started or will be starting in the near future. Some lenders will consider applications from clients who have only recently found work, while others require anything from 3 to 12 months of pay slips and employment history. Things become particularly challenging if you are a self-employed expat returning to the UK, though qualifying for a mortgage with a specialist lender is still possible.
Overseas assets and equity
Qualifying for a mortgage (or any other type of major property loan) is easier if you already have assets or equity overseas. Though the process of securing a loan against overseas assets can be slightly more complicated, it is nonetheless a viable option for securing a mortgage in the UK. Using your existing assets or equity as security for a loan can also open the door to significantly lower rates of interest and more competitive overall borrowing costs.
Specialist Services for Expats Returning to the UK
At UK Property Finance, we understand how daunting it can be to relocate to a new country – even if the country in question is your home nation. Particularly when it comes to mortgage applications and general financial matters, returning to the UK as an expat presents an extensive range of challenges.
That is why we strongly advise obtaining independent financial advice at the earliest possible stage to ensure a smooth transition. For more information or to discuss your requirements in more detail, book your obligation-free consultation with a member of the team at UK Property Finance today.