Last Updated on 9th August 2020
Getting a mortgage as an expat returning to the UK is a common enquiry. UK residents may move overseas either for work or a career break, but when moving back to the UK, may struggle to get a mortgage. This is because most lenders will only lend to applicants who have had an address within the UK during the past three years.
Some lenders may need to see recent UK credit files and as expats have been abroad, this can be a major stumbling block. That being said, there are lenders that will consider mortgages for expats returning to the UK, irrespective of whether or not an address in the UK can be provided.
Before moving abroad, UK residents can also take steps towards mortgage approval upon return, such as keeping a UK correspondence address. More information on expat mortgages can be found throughout this article.
How do lenders assess mortgages for expats
Going to a high-street lender may result in an expat being declined, especially if you’ve just returned to the UK. That doesn’t mean to say that there aren’t lenders that will consider you for a mortgage.
Lenders may consider expats on criteria such as:
- Only just returned to the UK
- Living outside the UK and not yet returned
- Only returned to the UK 3-12 months ago
- Possible 90% LTV mortgages (subject to other criteria)
- Retired expats returning to the UK
- Self-employed in the UK with 1 years accounts
- Self-employed outside the UK (very difficult)
- Employed applicants returning to the UK
- Applicants generally require clean credit
- Adverse credit possibly accepted if issues were over 6 years ago
This is not an exhaustive list. Each mortgage for an expat is assessed on a case by case basis. If you’re unsure, do speak to a specialist advisor. Aiming to apply with a lender without knowing their criteria, will likely result in you being declined.
There are steps you can take before leaving the UK to ensure that when you do return, getting a mortgage shouldn’t be too difficult.
Keeping a correspondence address in the UK
Keeping a correspondence address in the UK can make all the difference in being approved a mortgage. You can use the address of family members such as parents or someone you really trust. Remember, all your post and correspondence will be going to that address so think carefully before making a decision.
By maintaining an address in the UK, you may have an option of lenders to choose from on your return. Not having a UK address for the past three years will result in limited mortgage options. Although there are lenders that will consider you without a recent UK address, taking precautionary steps before leaving is wise.
Aim to save a 25% deposit
When applying for a mortgage, larger deposits are always music to a lender’s ears. This is because a strong deposit enables lenders to lend with more confidence. A strong deposit would start from around 25% and anything above is a bonus. Having a 25% deposit should enable you access to great options in terms of lenders and mortgage deals. Anything less than a 25% deposit can limit your options.
As an expat who has just returned to the UK, it’s important to remember that your UK footprint will be minimal. This is especially true if you’ve been overseas for a very long time. Applying with a small deposit on your return to the UK can be difficult, as for lenders it would be very high risk. Having a substantial deposit of around 25% and over would give lenders confidence and could be the deciding factor in getting approval.
Maintaining a UK credit file
Keeping a credit file in the UK whilst abroad is a smart move to make, especially if you plan to apply for a mortgage on your return. As discussed, lenders will make a credit check and if you don’t have an active UK credit file, it could result in a failed check. Maintaining a clean UK credit file can also show lenders that you’ve not had any financial troubles in the UK which can make mortgage approval a lot easier. If an underwriter is on the fence about giving you a mortgage, a clean credit file could save the day.
You can maintain a UK credit file whilst abroad by either using an international credit card with a UK bank or by keeping an account in the UK open. Ensure your bank is aware that you’re abroad.
Employment plans on returning to the UK
Having employment to return to in the UK is ideal. Lenders will make assessments on income and having permanent employment to return to can speed the mortgage process up. If you’re returning to the same employer, this is even more advantageous as lenders are able to see employment history. If you’re starting employment with a new employer, lenders may request at least 6 months of employment history. Other lenders may be satisfied with just 3 months of employment history.
Each lender will vary in how they conduct their mortgage assessments as they all have varied criteria. Even if you have not yet started a job, but have a job offer, this may also be sufficient in getting a mortgage on your return to the UK. Lenders will need to see evidence of an official job offer, such as a letter, including start dates and salaries. Having a predated employment contract and a reference from your employer may also be required.
If you’re self-employed, then your options are limited. Almost all lenders will require at least 12 months of trading history within the UK. It’s best advised to speak to a specialist advisor to see if there are any possible routes to a mortgage. You can make an enquiry at any time or simply ask our specialists a question.
Specialist advice for expats returning to the UK
If you’re able to qualify for a mortgage, it’s important to bear in mind that in some cases, mortgage rates may not be the most desirable. Not every case will have high rates, some expats may be able to secure great deals. Mortgage rates are dependent on your individual circumstances. That being said, you could potentially remortgage to a better rate once you’ve had time to rebuild your UK footprint.
If you’ve just returned to the UK and require a mortgage, then you can make an enquiry with a specialist. You can call us on 0800 195 0490 or simply ask our advisors a question online.