Most people normally buy a house using a mortgage. This is a great way to acquire property as the mortgage payments are usually lower or the same as the rent you would pay when renting the same house. If you are a citizen or permanent resident, getting a mortgage should not be difficult. If you are an expat, who is just in the UK for an unknown period of time, might be a year, five years or more, getting a mortgage can be difficult because lenders would not be sure if you would be there long enough to pay off the mortgage. That is why they have put in place strict rules, terms and conditions for those who are applying for mortgages for expats in the UK. For one, the repayment period will be considerably shorter. The property must also be a marketable rental property. Other standard requirements, such as proof of income and an insurance policy on the mortgage are also necessary. The following are factors to consider when applying for expat mortgages in the UK:
i) Rate of Interest
Just because you are an expat doesn’t mean that you should pay a higher rate of interest on the loan. The ideal lender should quote competitive interest rates on both fixed rate and adjustable rate mortgages. For this reason, you should start your search by making a shortlist of all the reputable lenders that offer expat mortgages. Next get a quote from each one of them and pick the most affordable lender.
ii) Deposit Required
Financing products normally come with a deposit requirement. For instance, the loan applicant may be asked to make a deposit of at least 15% of the property’s value. Some lenders may ask for 20% while others may be willing to offer 100% financing. Depending on the amount of money you have saved, be sure to pick a lender whose deposit requirements can fit into your budget comfortably.
iii) Flexible Terms
You do not want to be forced to pay hundreds of thousands of pounds over a five year period as this may be a challenge on your salary. The ideal lender, therefore, should offer flexible terms depending on your income level. A longer team means that you will find it easier to service the mortgage, and this will improve your chances of paying off the mortgage successfully.
iv) Reputation of the Lender
Before applying for a loan, be sure to do some research on the reputation of the lender. By reading newspaper articles and reviews about a given lender, you can easily make a decision.