How to Find UK Buy to Let Mortgages for Expats?
Some expats retain their UK property or expand their property portfolio and conduct a rental business as a landlord from their base overseas.
It isn't impossible to start a new rental business from abroad or manage an existing property across borders.
However, if you decide to move and have an existing buy to let properties, you will need to remortgage through a buy to let mortgage UK expat specific. That is because a current lender is unlikely to offer the same terms once you're not resident in Britain.
Here are a few tips that will help you secure a buy-to-let mortgage as an overseas landlord:
Apply Through an Expert Broker in Expat Buy To Let Mortgages UK
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. A broker will help you secure competitive interest rates by comparing all of the rates on the market.
Get Advice on Evidencing Your Income for Expat Buy to Let Mortgages UK
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 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.
The trick is to make sure your application contains all the information the lender needs to approve an application for anybody comparing expat buy to let mortgages UK.
The fewer questions they have, the more likely the underwriter is to approve your expat mortgage.
Give us a call if you need any tips and advice structuring your application to ensure you have access to the best expat buy to let mortgages UK.
Check the General Eligibility Criteria Against a Buy to Let Mortgage UK Expat Product
As well as criteria specific to expat buy to let mortgages UK, your lender will still need to run through other checks.
That means your circumstances will dictate which mortgage provider is right for you. For example, 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.
Alternatively, Revolution can advise on a range of potential mortgage lenders and products specifically designed for people approaching or above retirement age, offering expat mortgages.
There are also specialist lenders who exclusively provide later-life borrowing and may be more suitable than a general mortgage provider with a few UK buy to let mortgages for expats.
If this applies, give Revolution Brokers a call, and we will advise on the most suitable mortgage lenders for you.
How Can I Improve My Credit Report to Qualify for UK Buy to Let Mortgages for Expats?
Your credit file is an essential factor since a lender will need to establish whether you are creditworthy.
All UK lenders need to assess the affordability of a mortgage. Still, they'll also want assurances that applicants for expat buy to let mortgages haven't been in severe credit problems before.
A history of repossessions or bankruptcy, for example, make it significantly harder to find a mortgage since the lender will need to consider the risk that a similar scenario will arise.
It's also very difficult for a lender to pursue debts or begin the legal repossession process if the property is owned through a buy to let mortgage UK expat living overseas. Therefore, the underwriter will want more credit information to verify the application is acceptable.
Demonstrating your credit history can be tricky for buy to let mortgage UK expat applicants since you are unlikely to have had any UK finance history for some time.
For example, if you have a UK credit card, this can help prospective lenders assess your good standing with credit providers.
If you haven't lived in the UK for a few years, you can start to build up a track record of healthy credit by taking out a credit card with a small balance and ensuring you pay back the total in good time.
While it does cost a little more to pay for items with a credit card in an alternative currency, having a credit report in the UK could significantly impact the interest rates you can achieve on expat buy to let mortgages UK.
Can I Get Expat Buy to Let 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 lending is highly specialist, so it's crucial to work with a professional broker with plenty of experience negotiating UK buy to let mortgages for expats.
The likelihood of approval all depends on the property's value, your security and the amount of deposit you can offer against expat buy to let mortgages UK.
There are also several strategies to help lower the risk and make a lender offering UK buy to let mortgages for expats more likely to consider your application, for example:
- Offering a higher deposit to reduce the Loan to Value ratio.
- Providing additional security in addition to the property - ideally a UK asset.
- Contextual information demonstrating the reason for your credit issues was a one-off.
Remember that credit issues remain in your file for six years, so even some late payments or a default five years ago will still crop up in the application for a buy to let mortgage UK expat.
It's always better to be proactive in addressing the issue and structuring your application to acknowledge that lenders offering expat buy to let mortgages might be reluctant to lend because of credit problems in the past.
Often, if you can show that these are unlikely to recur - for example, you had some credit issues due to redundancy and are now in stable employment - the lender may take a much more flexible view.
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.
Can I Get Expat Buy to Let Mortgages UK on an Interest-Only Basis?
It is highly unusual for expat buy to let mortgages UK to be issued on an interest-only basis.
This likelihood is because UK buy to let mortgages for expats are 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.
As an illustration:
- A lender approves a buy to let mortgage UK expat for £90,000 with a 10% deposit, paid back interest-only.
- After three years, the borrower becomes bankrupt, and the lender is in a repossession scenario.
- They haven't received any repayments against the £90,000 they have loaned and need to try and recoup this by selling the property.
- If that property has fallen in market value by 10% in the last three years, the lender will undoubtedly make a loss.
- Should they sell the property for the full £100,000, they still may incur a loss when considering the legal and administrative costs of repossessing ownership of a property, putting it on the market, and going through the process of recording a sale and handover of title deeds.
This illustration shows why the risks are so high - although, if you were to offer a sizable deposit and require a small mortgage for the balance of the purchase, a specialist lender might consider a buy to let mortgage UK expat application.
There can be circumstances where lenders will agree to an interest-only buy to let mortgage UK expat. However, it will depend on having an excellent credit rating and a high-value deposit.
Any other risks, such as poor credit, being close to retirement, or a non-standard property, would make it extremely unlikely you'd find an interest-only deal.
What Are the Income Requirements on Expat Buy to Let 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 £25,000.
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.
Therefore, if you earn a salary overseas and have no income streams in the UK, your pool of potential lenders immediately drops.
Many expat buy-to-let mortgage lenders will have criteria showing which countries they will consider applications from expat residents and which currencies of income they will find relevant.
It's essential you work with an independent broker to verify whether your income will be considered in your eligibility for UK buy to let mortgages for expats.
Revolution can also recommend lenders who will include income from your current home nation in their affordability calculations.
Your choice of mortgage provider is also dependent on where you live, how much you earn, and in what currency.
What Deposit Do I Need to Apply for a Buy to Let Mortgage UK Expat Product?
The deposit you require will depend on your lender, how much you wish to borrow, and the property's value.
Typically, you will need a 25% deposit if you already own a UK property, but the lender will also take a charge 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 are more favourable.
Should you be looking for UK buy to let mortgages for expats 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 as a New Landlord to Get the Best Expat Buy to Let Mortgages UK?
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, 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.
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 for UK buy to let mortgages for expats 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 UK Buy to Let Mortgages for Expats
It can feel like a minefield trying to find the right lender for your buy to let mortgage UK expat product, with the added complication of being an expat living overseas.
Our top tips to make the process of applying for UK buy to let mortgages for expats 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 may be 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 buy to let mortgage UK expat applications - mortgage applications can require a lot of paperwork, and Revolution Brokers help to streamline the application process to ensure everything is completed thoroughly, correctly, and on time.
Using a broker ensures that you have access to buy to let mortgage UK expat rates and terms not available on the open market and is the safest way to ensure you are getting the best deal when trying to compare different mortgage costs from outside of the UK.
Business loan broker work with specialist mortgage providers. We negotiate rates on your behalf and work 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 [email protected].
