Expat Needing A Mortgage?

Posted on February 14, 2019

For some UK citizens, living and working abroad for a couple of years can be very tempting.  An exciting adventure, a chance of a lifetime, a fantastic opportunity to try something new.   If you want to buy a property when you return, however, it can cause a few problems.  Many standard mortgage lenders may have an issue with the fact that you haven’t had a UK address in the last three years.

If you approach a mainstream lender, they will carry out a credit score and if you don’t have enough points, due to your address history, then you will be declined.  You might have to consider renting for a while until you build up some UK credit history again but before you give up completely, you might want to try a smaller bespoke building society, rather than a mainstream lender,  They will often assess the case on an individual basis and carry out a credit search, NOT a credit score.

This means that an underwriter will look at your credit record to make sure that there is nothing untoward in the background.  In this case, having an overseas address shouldn’t cause so much of a problem.

If you are currently living abroad, and plan to return home and buy a new home within the first twelve months of being back, consider the following points before doing so:

  • Maintain a correspondence address in the UK: This can be with a family member or a friend.  Make it someone that you trust as some of your post will inevitably end up going there.
  • Keep a credit footprint in the UK: Where possible and for convenience, you may want to keep at least one UK current account open, as well as a credit card, however make sure that the bank will allow the accounts to remain open if you live abroad.
  • Have employment arranged for when you return: It may well be that you are coming back with the same employer – this makes things much easier as you have a history with that company. If you are moving to a new firm you may need to have been employed for at least three to six months. However, if you are staying in the same industry then a letter of appointment with a start date and salary, your contract and an employee reference will be needed.
  • You may have to wait: If you are coming back and you want to go self-employed then realistically you will not be able to think about buying a new home for at least twelve months, if not longer. The only exception to this might be if you have a contract as an IT professional/oil and gas professional/accountant, with a daily pay rate and experience in that industry, then help may be available more quickly.
  • Have a deposit of at least 25%: Unless you are staying with the same employer it is likely that the new lender will cap your mortgage at 75% or lower. Of course, this can change according to product availability.

The above is not an exhaustive list, but it is a good starting point if you are returning to the UK soon and looking to buy a new home when you get here.   This article was written by John Charcol.   Whether you have just returned to Britain after some time abroad, or are planning on coming home soon, they can provide you with the all specialist advice and any help you need.

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