Specialist mortgage articles to help you navigate the minefield of getting a mortgage to buy a home or to remortgage your existing home either a residential or a buy to let.

At SAM Conveyancing we give you all the information you need to know and write it in a way that makes it easy to understand. We also have a panel of mortgage brokers to help you find the best mortgage rate in the whole of the market and to complete the paperwork for your mortgage application.

Please click, read and enjoy. If you get stuck or need any help then call us and speak to a friendly member of the SAM Conveyancing team - 0333 344 3234 (local call charges).

Mortgages for Non-UK residents: overseas mortgages

04/02/2019
Mortgages for non-UK residents, often known as overseas mortgages or international mortgages, are used to buy property in a country in which you are not normally resident. This is irrespective of whether you are for example a foreign investor looking to buy property in the UK or a UK expat looking to buy property in France or even the UK.

Click here if you're trying to find out more about getting a mortgage as a non-UK citizen (but as a UK resident).

Essentially the process for getting a mortgage of this sort is very similar to one for obtaining a standard domestic mortgage - you still have to produce evidence of who you are, where you live and how you're going to repay the loan - however they do vary in terms of exactly what kinds of proofs you need.

Additionally and as with all financial products where risks are perceived to be greater - pursuing someone internationally who has defaulted on loan repayments is always likely to be more difficult and costly than if they were a domestic customer(!) - these mortgages are more expensive and/or often require much higher initial deposits, typically starting at 20%. You can also expect to pay more, for example, if securing the product requires translation services.

Non-UK resident vs. Non-UK citizen - what's the difference?

This article concerns people who are not resident in the UK regardless of whether they are UK- or non-UK citizens.


This article considers:




Non-UK resident? Looking for an overseas mortgage to buy a home?

Our independent mortgage brokers can give you the best chance of success in getting a mortgage offer from a domestic lender.

They can find the right product for you from more than 90 lenders and more than 20,000 mortgages, including particular mortgages which are only offered as international mortgages, and your initial consultation is free.

* * Access to whole of the market – Available Outside of Work Hours – No need for face-to-face meeting with mortgage advisor - Terms Apply


    1

    What are your mortgage options when buying as a non-resident?

Essentially you have three; approach a UK lender for an overseas mortgage (we recommend using an independent mortgage broker to find the right one and the right product), approach an overseas lender for buying a property outside the UK (lender domestic to the relevant jurisdiction) or apply for a remortgage or rate switch if you already have a mortgage.

1 Get an overseas property mortgage from a UK bank

Let's say that you're a UK expat and you want to buy a property in Germany for example.

Advantages:
  • No need to translate documents.
  • You'll have residential consumer protections from the UK Financial Conduct Authority and the Financial Ombudsman Service. This might be particularly important in the event of negative events resulting from a disorderly Brexit.
  • You can use a UK independent mortgage broker, as stated, to help you find the right product.
  • The size of deposit you're expected to put up might be lower than it would be from a German lender.

Disadvantages:
  • A UK lender won't have the local knowledge that a German lender would.
  • A German lender might well offer better interest rates and it'll have better knowledge about local law.

2 Get an overseas property mortgage from an overseas bank

Let's say you're a non-UK resident and, as before, you want to buy a property in Germany so you apply to a local lender.

Essentially you should reverse the advantages and disadvantages above.

The German bank might be able to give you a better interest rate and will have better knowledge of the local market and laws, but you'd have to pay more for things like translation services.

You'd have to look much harder and pay more for a specialist German mortgage market English-speaking mortgage broker if you wanted to use one (this might well negate any advantages of instructing one) and you might be less protected in the event of a disorderly Brexit.

As stated previously, you might well be expected to put up a larger initial deposit than you would for a UK lender.

3 Apply for a remortgage

Naturally you can only do this if you already have a mortgage.

A mortgage broker can help you if you want to shop around for a rate switch. Otherwise you can approach your lender and get a larger mortgage.

The disadvantages of this option are that you'll most likely have to put up your existing mortgaged property as collateral, thus putting it at risk if you default on repayments, and you might find the conditions of your remortgage or from your new lender to be particularly stringent.
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    2

    What types of mortgage can you get?

Theoretically all types of mortgage are open to you, depending on whether a particular lender offers that particular product.

An international mortgage might for example be tailored to your being self-employed, or if you're buying to let it might be available on an interest-only basis. In the same way it might be fixed or variable. As also stated, there also specialist products exclusively for the international mortgage market.

Some mortgages might not be available in some jurisdictions, naturally, depending on the prevailing local laws etc. and if you're a non-resident of the UK, you won't be able to apply to the Help to Buy scheme.

    3

    What sort of proofs might lenders require from you?

In essence, any lender needs to establish basic matters such as your address in whichever jurisdiction you live in (or intend to live), which country you come from, where your place of birth is and which jurisdiction/s you are obliged to pay tax in.

That said, the actual specifics can vary greatly; for example, you don't specifically require a UK passport or visa to get a mortgage in the UK although if you can present universally credible documents you're likely to have a greater choice of potential lender and might get better rates.

You'll most likely have to prove your income and assets although these documents can take different forms and might need to be translated or viewed in line with local customs and laws.

Specifically regarding income, standard documents of proof are things like payslips and bank statements. However if you have a complex income structure, you might be expected to provide references and have supporting evidence from your accountants and the situation is always improved if the latter professionals are members of internationally-recognised bodies, such as the Institute of Chartered Accountants in England and Wales in the UK.

    4

    How might an international mortgage product be structured?

It should be clear that although proofs are always needed to obtain a mortgage and these are likely to be more rigorous when an applicant is effectively cross-jurisdictional, the nature of the actual proofs required can vary greatly.

Equally the ways in which lenders balance their risks and require increased remuneration if such risks are thought to be increased can be very diverse.

We found one example of an offshore mortgage product from a large UK lender which was ostensibly aimed at applicants looking to leave the UK to live/work overseas or moving to live and work in the UK.

To apply, applicants would either have to maintain a minimum balance of £25,000 in an account with them or have a minimum salary of £75,000 paid into the account. These stipulations would presumably make it easier for the lender to claw back funds in the event of any defaulting on repayments. 

Another common vehicle used in conjunction with overseas mortgages is the non-status mortgage.

Non-Status or Self-Certification Mortgage

We mention these because applicants don't need to prove income in order to obtain them - something you have to do for most mortgage products - and they are therefore often useful for the self-employed.

Sometimes the application process for non-status mortgages doesn't require credit checks; instead the application focuses on the value of the property in question and how the borrower proposes to make repayments. 

However, for the vast majority of non-status mortgages, you're restricted to a maximum loan-to-value (LTV) of 70% - i.e. you have to present a deposit of possibly even 30% of the asking price of the property and the lender generally charges you a higher interest rate than for other mortgage types

Like all residential mortgage products sold within the UK, self-certification mortgages are regulated by the FCA, giving you a significant degree of consumer protection.

Non-UK resident? Looking for an overseas mortgage to buy a home?

Our independent mortgage brokers can give you the best chance of success in getting a mortgage offer from a domestic lender.

They can find the right product for you from more than 90 lenders and more than 20,000 mortgages, including particular mortgages which are only offered as international mortgages, and your initial consultation is free.

* * Access to whole of the market – Available Outside of Work Hours – No need for face-to-face meeting with mortgage advisor - Terms Apply

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