Buying your future UK home via an expat mortgage

Published:  7 Jun at 6 PM
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For expats thinking of buying a home in the UK for retirement after their contract ends, getting a mortgage can be a challenge.

At present, some four million British citizens are living overseas, with a good number preparing to return home once they’ve retired. One way of making sure there’s a home to go to is to purchase a buy-to-let property and tailor the rental lease to the end date on the overseas contract. However, if a mortgage is needed, the bureaucratic requirements can be more complicated than expected, with stumbling blocks including a reduced choice of providers, tougher ID checks and restrictions on certain countries.

Firstly, few banks and even fewer major building societies offer expat mortgages, leaving a choice of smaller or specialist lenders. The plus point is the growth in alternative providers caused mostly by increasing expat interest in buying investment properties in the home country. The three major lenders, unheard of by the majority of expats, are Kent Reliance, the Market Harborough Building Society and Al Rayan Bank. Additionally, you’ll need to accept slightly higher interest rates as well as producing a deposit of around 25 per cent of the value of the chosen property. For lenders, the margins are good and acceptable clients are normally good for the money.

Another headache could well be the fact that only expats living in certain countries are eligible for expat mortgages. Those living elsewhere are unlikely to be able to realise their dreams if their present countries of residence are deemed to have a reputation for money laundering. For example, if your present contract is with a multinational in Nigeria, an employment reference could make all the difference between outright rejection and eventual approval. Self employed expats will need to use a recognised accountancy firm.
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