Once the emotional turmoil of losing a loved one eventually subsides and you discover that you’ve inherited your grandparents property, you are likely feel somewhat joyous. You might also be considering putting up more buildings on the land for example. You might want to keep your UK property, so you might plan to rent it out or buy a share from other family members. So, no matter what, you will need a mortgage to make all of these plans happen.
But you should remember that getting a mortgage as an expat isn’t always as straightforward as it can be for a UK resident. It’s okay. If you have inherited property and need a loan to make more from the property, then this short guide will show you how UK expat mortgages work.
Why Would You Need a Mortgage on Property You Inherited?
A lot of people believe that they can’t get a mortgage or borrow money against a home they inherit. But that’s not true.
They might still need a mortgage for other reasons – such as:
- To buy out other heirs – if you share the inheritance with other family members, you might need money to buy the house outright.
- To fix up or update the house – a mortgage can help pay for repairs on an older home.
- To pay taxes or estate costs – sometimes the property has debts or taxes that need to be paid.
- To release some money – some expats use the value of their homes to get money for other things.
If you know why you need the mortgage, it will be easier to find the right expat residential mortgage in the UK who offer expat residential mortgages.
What Is a Mortgage for Expats?
People who live outside the UK but want to borrow money based on their UK home can get an expat mortgage. People who don’t live in the UK can’t get standard mortgages. Lenders have made special mortgage products for expats to help them with this problem.
These mortgages take into account that your income might be in a different currency, your tax records might be from another country and you might not have a recent UK credit history.
What Lenders Think About Expats
When you apply for an expat residential mortgage in the UK, lenders will look at:
- Where you live: Some lenders only accept applications from certain countries.
- Your income and currency: You need to show proof of income, which will be changed into pounds for things such as affordability checks etc.
- Your credit history: Lenders will look at your UK credit history if you have one. If not, they might check your financial history in the overseas country where you reside.
- What are your plans for the property? Will you live in it, rent it out, or leave it empty? This determines kind of mortgage you secure on the property.
Challenges for Expats
It is absolutely possible to get a mortgage while living abroad, but it is however harder:
- More strict checks – more documentation may be required, such as contracts, tax forms, and bank statements.
- Fewer lenders – Not all banks in the UK will give mortgages to people who live outside of the UK. Specialist UK expat mortgage lenders exist to solve this problem.
- Higher interest rates – Lenders often charge more for expat loans because they deem them to be riskier.
- Currency issues: If you earn money in a different currency, the exchange rate can have an effect on your application.
A lot of expats ask an expat mortgage expert for help because of this.
Why Should You Hire an Expat Mortgage Advisor?
It can be easier to get a mortgage as an expat if you work with a professional. They know which banks and other financial institutions will work with people that are either British Expats or Foreign nationals who are now living in another country.
A specialist expat mortgage broker will:
- Source the whole market to determine which mortgages for expats have the best rates and terms.
- Help with getting all the papers together and ready.
- Figure out if you need a mortgage to buy a home or a buy-to-let property.
- You might apply to lenders who will turn you down if you don’t get the right help from a mortgage expert.
How to Improve Your Chances
You chances of being approved first time and a smooth application if you prepare well – this includes:
- Get your papers in order. This includes your ID, proof of address, income, and tax information.
- Check your UK credit report and make sure it is correct if you still have one.
- Pick the right type of mortgage. If you want to rent the house, you’ll most likely need a buy-to-let expat mortgage.
- Get help from a specialist mortgage advisor – they know which lenders are best for your situation.
Last Thoughts
If you live outside the UK and inherit a home there, it could be a big financial opportunity, but you might still need a mortgage to get the most out of it.
Expatriates like you can get UK expat mortgages, but they may cost more and require a much more complex application process. If you work with an expat mortgage expert they will help you find the right lender and show you how to do it.
Inherited Property in the UK and Living Abroad?
Contact us today to secure the right mortgage with the help of an expert. Our mortgage advisors for expats can help you find lenders, explain the paperwork, and get the most money out of your UK home.