standard Our Guide to Mortgages for Foreign Nationals

Our Guide to Mortgages for Foreign Nationals

damianyouell If you are a foreign national looking to invest in the UK, now may be a good time to invest according to recent research. That is largely because of the movements in relative currency values coupled with more attractive pricing.

While the study reveals that London is more attractively priced for foreign investors now compared to three years ago, other sources say that outside of the capital, Manchester is the top city in the UK for foreign investment.

However, if you are both resident outside of the UK and a non-UK citizen, you may need help finding a suitable mortgage for non-UK resident status applicants.


Why can it be difficult to get a mortgage as a foreign national?

Applying for a mortgage is a process that requires a potential lender to meet both regulatory requirements and their own risk-management constraints.

Those apply irrespective of your nationality and the process for UK nationals abroad versus non-UK is broadly similar.

In the case of a foreign national mortgage where the borrower is residing outside of the UK, it may be more difficult, though not impossible, for potential lenders to complete the required formalities.
This may be because if you’re living outside of the UK, you may have little or no UK credit history.

Another issue arises because lenders are required by law to confirm your identity and place of residence. That can be a challenge with foreign nationals living outside of the UK.

It might also be difficult for you to provide both references and evidence of your income/financial status in a format that a mortgage lender would be familiar with.


Is buying property in the UK as a foreign national possible?

Yes, it is. While it may be challenging to get a UK mortgage as a foreign national from the usual high street bank and other recognised sources, there are expat mortgage providers who are familiar with mortgages for non-UK residents.


What checks will a mortgage lender make?

Lenders will typically undertake the same standard reviews as they would for a UK national to ensure:

  • that you are who you claim to be and that you reside at a known address;
  • your income – Whether you are an employee, self-employed or a business owner, the lender will need to satisfy themselves that you have regular income sufficient to support the loan you are requesting. The sources must be certified and verifiable. This review of your financial position may include a consideration of your liquidity. If your wealth is held in easily accessible sources such as cash and shares, more lenders may be amenable to your application;
  • you have previously conducted your financial affairs in a responsible fashion. If you have no UK credit history to check, your lender may ask for alternatives.

Finally, they may need to understand whether or not you plan to reside in the UK and where your future income will come from over time. This might require a discussion of your visa status – unless you are an EU citizen.

Visas that have permanent, semi-permanent or longer-term residency and working rights are likely to be better received as supporting evidence for your application if you plan to take up residence in the UK. However, securing a mortgage is not necessarily reliant upon you doing so.


What mortgage types are available for expats?

Assuming you are able to meet the above criteria and have used help to find an appropriate mortgage provider, you may find that you will be able to secure both owner-occupier mortgages and UK buy to let mortgage for foreign nationals.


Can I get a non-UK resident buy to let mortgage?

As indicated above, yes this is possible – providing you meet certain criteria.

However, things such as identity checks and evidence of income may be more challenging and time-consuming than in situations where you were permanently resident in the UK.


How much deposit will I need?

As a general rule, the larger the amount of deposit you are able to put forward, the easier it may be for you to find a mortgage suitable for your needs.

In a situation where you are a non-UK national living overseas, lenders will probably expect you to have a minimum of 25% with some requiring more.


Does it matter where my deposit comes from?

Typically, yes. This isn’t impertinent intrusion. Under the prevention of both national and international anti-money laundering laws, you will need to show the source of your funding. That must be traceable.


Next steps for foreign nationals looking to invest in the UK

Although there are more formalities to go through, the good news is that mortgages for foreign nationals buying in the UK as an overseas investor are available.

It’s imperative though that you avoid wasting considerable amounts of time in making applications to lenders who are unlikely to be receptive.

That is where we at Needing Advice can help by ensuring that you are both well prepared and connected to potential lenders who we know may be interested in going further.

About the Author

Business protection expert helping business owners of all sizes protect their families and businesses from the effects of death and illness. Advising clients on shareholder protection, key person cover and relevant life policies. Also offering personal clients excellent advice on Mortgages and Protection solutions. From first time buyers to remortgages. All types of clients considered.

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