In This Article
What are expat buy to let mortgages?
Expat buy to let mortgages are mortgages for UK properties rented out but owned by British passport holders who no longer live in the UK.
The mortgage marketplace is smaller for expats than for standard buy to let applicants.
This is because only a selection of lenders will offer mortgages in the UK to applicants who have left the country.
The main reason is that it is potentially more challenging to get hold of an applicant should an issue arise around paying the mortgage.
However, some lenders still offer their products to these borrowers as long as they meet the lender’s individual criteria.
Criteria for expats will change from lender to lender but commonly, the vital thing that lenders look at when underwriting expat buy to let mortgages is income, country of residence, time outside of the UK and credit commitments in the UK.
Many expat buy to let lenders consider it important for the applicants to have active credit and UK bank accounts already so that they can be found more easily when carrying out credit checks.
It is important to look for a mortgage adviser with experience in arranging expat mortgages, as no brokers cover this area.
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Are expat buy to let mortgages more expensive than standard buy to let mortgages?
Usually, expat buy to let mortgages are more expensive than standard buy to let mortgages.
This is because most buy to let lenders will not consider expats for their mortgage products.
Most lenders offering their buy to let mortgages to expats are either building societies or specialist lenders.
Lenders charge different rates and fees, and they change regularly.
It may be that a buy to let lender offering expat mortgages charges an additional percentage on the arrangement fee as a premium for what they may feel may be a higher risk than a standard UK borrower.
The amount charged in rates and fees may also vary depending on the loan to value of the case.
It would help if you talked to an experienced mortgage adviser who can give you a clear idea of what the rates and fees would be for a suitable product once they know more about your individual situation.
Can you get expat buy to let mortgages for limited companies?
It is possible to get expat buy to let mortgages even if the property is to be held in a limited company.
When a property is held within a company, the company is often an SPV (special purpose vehicle), meaning it is set up to buy and manage properties within that company.
It can be possible for trading companies also to get buy to let mortgages. However, fewer lenders will offer these.
For an SPV, the lender’s primary consideration is the directors and shareholders that own and run the company.
As it will be down to the directors to make sure that the mortgage is paid regardless of the circumstances, the lender will need to know the full details of the directors and shareholders so they can make a lending decision.
If the directors are located outside the UK, lenders may consider this higher risk, resulting in a premium on the products charged by the lenders that offer these mortgages.
Your mortgage broker can tell you which lender may be suitable if you own a property within a limited company, but are based abroad.
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Do you need a mortgage broker for expat buy to let mortgages?
An expat buy to let mortgage is a specialist product. As a result, if you are living abroad and considering taking a mortgage for an investment property, you should look for an experienced mortgage broker.
Most lenders will not offer expat buy to let mortgages, and the ones that do, have differing criteria.
This means that it can be tough to know whether you would qualify for a mortgage if you do not have extensive knowledge about buy to let mortgages and lender’s criteria.
A skilled mortgage adviser will know which lenders are most suited for your individual situation.
This can save you time when looking for a mortgage, as it reduces the chance of speaking to the wrong lenders.
Most mortgage advisers will be willing to give you a free consultation so that you understand your options.
How much deposit do you need for expat buy to let mortgages?
The amount of deposit you need for an expat buy to let mortgage will depend upon the individual lender.
Lenders also change their criteria regularly. However, a common minimum deposit for a buy to let property is 25%.
For an expat buy to let property, lenders often require a larger deposit, such as 30% to 40%.
Due to the continuous changes to lenders’ criteria, it is always best to hear this from a mortgage adviser, as they will be able to tell you the minimum deposit required with the lenders that are suited to your situation.
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Does it matter where you’re living abroad for an expat buy to let mortgage?
Your country of residence can be a large factor when applying for an expat buy to let mortgage.
The reason is that they are usually countries that are not acceptable to specific lenders. This can be due to the country being regarded as having less of a stable economy or a more difficult legal process when taking possession of an applicant’s property.
Lenders’ lists of which countries are and are not acceptable to them will vary and possibly even change over time.
For instance, some lenders cannot lend to expats that live in Dubai, whereas other lenders may be OK with these applicants.
When your mortgage broker understands your situation, they will take note of your country of residence so they can talk to the lenders about your case, making sure that your country of residence is acceptable to them.
If you are an expat located abroad, wishing to purchase or refinance your investment property, there should be solutions available to you.
Most lenders, however, will not lend to expats on buy to let mortgages, and the ones that do may charge a premium on the product.
Expat buy to let mortgages are a specialist product, so finding a mortgage adviser with the right experience is always recommended.
Be sure to ask your broker whether they have a background in arranging mortgages for people in a similar situation to yourself.
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