An Expat client submitted an enquiry to refinance one of their portfolios, in this case a 2 flat multi-unit block on one freehold. The client had bought the property for cash and was looking to release the equity in the property to fund further purchases.
The challenges around Expatriate mortgages usually tend to be around credit score (or lack of) and whether the clients have any open lines of credit in the UK – all lenders will require the clients to have a valid UK bank account as this will be needed for the direct debit for the monthly mortgage payment once complete.
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Another thing to consider is that most lenders will have a minimum income requirement that will need to be satisfied and as ex-pat clients will invariably be paid in a currency other than Sterling. Most often you will find that ex-pat investor has good income but the thing to bear in mind is that lenders will shave a portion of their income off to allow for fluctuations in the exchange rate, whilst others will look back at the performance over the last 5 years and take the exchange rate at its worst to underwrite on a worst-case scenario.
Things to consider when discussing Expatriate finance with a client:
• Rates are higher than standard
• Lender’s arrangement fees are usually a percentage of the loan rather than a flat fee
• Check to see what credit they still have in the UK – will need an active bank account
• Certain countries will not be accepted by lenders, below are 2 links to the financial action task force for countries with increased monitoring or calls for action. Other lenders will use the Basel scale, the second link:
Financial Action Task Force
Basel Scale
• Certain Currencies will not be accepted by Lenders, usually if the currencies is volatile
• Loan to Values can be restricted
To know more and speak to one of our Expat Mortgage Experts, call us now on +44 1494 622 555. You can also fill in this short online form to get started. Our team of Expat Mortgage Experts will get back to you straight away.
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