Mortgages for Foreign Nationals
Mortgage Lane has clients from all over the globe, including foreign nationals. We are specialists in Mortgages for applicants investing in the UK from overseas, advising on buy to let and commercial property. Whether you are first time buyer or an experienced portfolio landlord we are well versed with your situation. Our FAQ section and our blog has interesting content on Mortgages for Foreign Nationals, to help assist applicants with the differences when comparing to mortgages for UK citizens.
PROCESS BREAKDOWN
Information gathering and advice
The first process in your foreign national mortgage application will be gathering or updating information in relation to the property, tenants, or yourself. Once this has been established your expert mortgage broker will make a product recommendation.
Credit approval
Once you are satisfied with the product recommended and have confirmed to proceed, this will usually be submitted the same day to give you a decision, until this point there is still nothing to pay! As long as the Agreement in Principle (AIP) was approved, we can move to application stage where fees become payable.
Application, valuation & underwrite
Once the application is submitted, your valuation will be booked in and most of the time (depending on the lender). This will usually completed once your initial underwriting has been completed. Once the valuation is returned, if acceptable, the lender would then look to make a formal offer. You can then move to legal stage.
Offer and completion
Once you have had your Foreign national mortgage offer, you will require adequate legal advice and then once you’re happy, your solicitor can draw this down once the legal requirements are satisfied. Your broker at Mortgage Lane will always be checking in on the application post offer, so we are chasing for you too!
With or without a UK Footprint
For foreign nationals this is the most common hurdle is having a UK footprint, however we do work with lenders that are happy without a UK footprint, they will require you to have a UK bank account. There are many options for applicants that do not have a footprint in the UK, some of which include:
- Bridging finance to obtain a lending profile
- Mortgages with lenders also offering a Bank account opening simultaneously
- Joint venturing with a UK national
Letting Types of Foreign National Mortgages
Foreign nationals usually face extra criteria requirements to obtain eligibility for some of the most competitive mortgage products in the UK. At Mortgage Lane, we are experienced to place you with the most suitable cost effective lender. Foreign national mortgage lenders can either be relaxed or more cautious when lending to applicants in relation to minimum income, loan size and experience. Below we will explain all of the letting type variations that we see, as well as information on different ownership types and how this can impact your mortgage options.
A single let is a property rented to one household, or one family. Mortgage lenders do not usually require any experience for this letting type, so it can be suitable for first time investors or landlords looking to expand their portfolio.
Applicants with experience and a footprint in the UK will have access to tier 1 mortgage products that come at a reduced cost of borrowing, with single lets being low risk this can often be the lowest cost mortage products available to an overseas investor.
Lenders will access these properties against the valuers estimation of what the Assured Shorthold Tenancy (AST) will produce in rental income and not what you’re achieving. Please see more information on stress testing in our FAQ.
At Mortgage Lane we are used to complex cases where the property might be non standard construction. We have successfully obtained foreign national mortgages on the following residential buy to let property types:
- Cornish construction
- BISF Steel construction
- Precast reinforced concrete (PRC) construction
- Timber builds
- Timber frame
- Flat roof
- Deck access
- Single skin build
- Woolaway bungalows
- Colt bungalows
For Foreign nationals it is key to have some form of property experience before seeking a mortgage for a HMO property, otherwise rates may be less competitive.
Clients looking for mortgages on large HMO properties usually will require a lender using a local commercial valuer to commission an investment valuation report. This will provide the most accurate and appropriate valuation for this asset type. For experienced applicants there are many options for lending on these property types for a range of loan to values between 60-80%.
Any HMO with 7 or more rooms will require planning or a certificate of lawful use in order to be a compliant dwelling. Lenders will want to see this, so for purchases it is best to get this in advance. As well as planning you will require HMO licensing requirement. This licence is essential when securing a mortgage for an HMO property.
For foreign nationals looking to rent their investment property to a housing association or a charity on a long term lease will require specialist mortgage options.
Given that the letting type is specialist, the most competitive lenders often require some experience. This tends to be for 1-2 years in managing a UK buy to let, some lender will also take experience from overseas properties, but this is not widespread across all lending. Lenders in this space, with the best rates might also require an existing credit footprint in the UK which means having a mortgage in place already, sometimes a solution to this is to obtain a more expensive mortgage product as an experience vehicle for 1-2 years.
Our expertise encompasses properties leased to a broad spectrum of social housing providers, many of whom handle complex care arrangements. We are adept at assisting clients in obtaining mortgages for properties that serve a vital role in both short-term and long-term social housing. Some examples of properties where social housing is present might include the following tenant profiles:
- DWP tenants claiming housing benefits
- Care Leavers
- Social domestic violence tenants
- Asylum seekers
- Ex-Convicts
- Disabilities requiring in house care
With the above options, some lenders might only do a proportion of those tenant profiles, the risk to lenders with lending against these properties is any reputation risk that might arise due to evicting tenants in the event in repossession where the tenants are vulnerable.
The varied landscape of social housing requires detailed knowledge of each property’s lease agreement. It is essential for clients to provide Mortgage Lane with comprehensive lease details for the property they are looking to purchase or remortgage. This enables us to accurately match you with a lender that is open to the lease’s specific conditions, including the social housing provider, lease duration, covenants and tenant demographics.
Covenants to be aware of will be:
- Term of the lease
- Break clauses present
- Rent reviews
- Hand-back policies
By understanding the diverse needs of lenders against certain tenant groups, we can ensure that the mortgage products we recommend are perfectly suited to the unique challenges and requirements of your Social Housing Residential Buy to Let property, guaranteeing a customised and efficient mortgage solution.
Grade 1 and Grade 2 listed buildings are not always approved by foreign national mortgage lenders, however the advisors at Mortgage Lane are connected with lenders that have products designed to lend against these asset types. These properties tend to be large in value and size, therefore we often see them designed as flats or Multi Unit Freehold Blocks (MUFB).
Foreign Nationals we can help
Being a foreign national, you will not always qualify for standard mortgage products, having a mortgage broker will help direct you to the cheapest lenders available to you. Not all of these lenders are easy to reach, some do not deal with consumers directly. At Mortgage Lane we are used to complicated scenarios with expat lending, so if you have even more added complications to your case, try out one of our expert mortgage brokers. GET IN TOUCHLocations of our overseas clients:
- Australia
- Dubai
- Hong Kong
- Singapore
- China
- Europe
ANSWERS TO COMMON QUESTIONS AND QUERIES ABOUT FOREIGN NATIONAL MORTGAGES
Foreign national mortgage lenders on buy to let property will use the rental income of the security property, which is the property you are buying or remortgaging.
If you are buying in your own name, you may be stressed harsher than an applicant with a basic rate tax bracket. As an example a basic rate tax payer might be stressed at 125% and a higher rate tax payer at 145%. For a 5 year fixed, the lender may stress against the payrate of that product, such as 5.89% for example. In this case the calculation would go as follows for a basic rate tax payer, receiving rent of £600pcm from the property. 600 * 12 / 1.25 / 0.0589 = £97,792 (maximum loan)
It is interesting to know that Limited companies are stressed with a rental coverage of 125% mostly, unless it is a HMO mortgage. This means that if you are a higher rate tax payer, struggling with stress testing and achieving hoped loan sizes, you may be able to borrow more on a limited company mortgage.
Yes, as a resident and national of Singapore, you can obtain a buy-to-let mortgage in the UK. Here’s an overview of how this works and how Mortgage Lane can assist you in the process:
For buy-to-let mortgages in the UK, foreign nationals, including those from Singapore, can typically expect Loan to Value (LTV) ratios between 65% and 80%. This means you would need to provide a deposit of about 20% to 35% of the property’s value.
At Mortgage Lane, we have access to a range of lenders who are willing to offer mortgages to applicants from Singapore. We understand the unique needs and challenges faced by international investors and can help navigate the UK’s mortgage landscape effectively.
UK lenders will review the credit history of the applicant. For Singaporean residents, this process might involve considering any existing credit history in Singapore. If you have a strong credit history in Singapore, this can be a significant advantage in your application.
Mortgage Lane specialises in presenting your financial background in a manner that is favourable to UK lenders. We know how to highlight the strengths of your application, such as your credit history, income stability, and other financial assets.
We are experienced in handling mortgage applications for foreign nationals, including those from Singapore, and understand the intricacies involved in these applications.
We match our clients with lenders who best suit their specific financial situations, thereby enhancing the likelihood of obtaining a mortgage.
We guide you through the process of gathering and preparing the necessary documentation for your mortgage application.
We provide guidance on the legal and financial requirements for obtaining a mortgage in the UK, although we also recommend seeking specialised legal and tax advice.
Yes, lenders who provide mortgages to foreign nationals typically have a minimum loan size. For many foreign national lenders, the common minimum loan size is usually around £100,000. However, at Mortgage Lane, we have relationships with a diverse range of lenders, and some are willing to accommodate smaller loan amounts. Specifically, we have access to lenders who can offer mortgages to foreign nationals with a minimum loan size as low as £50,000.
This can be a significant advantage for foreign nationals who might be interested in investing in lower-priced properties or who may not need a large mortgage. Our expertise and connections in the industry allow us to help our clients find suitable lenders for their unique financial requirements, even when those involve more modest loan sizes.
Yes, as a resident and national of America, you can obtain a buy-to-let mortgage in the UK. Let’s explore this further, including the loan-to-value ratios, global money laundering risk ratings (specifically referencing Hong Kong as an example), and how Mortgage Lane can assist:
For buy-to-let mortgages in the UK, foreign nationals, including those from America, can typically expect Loan to Value (LTV) ratios between 65% and 80%. This means you would need to provide a deposit ranging from 20% to 35% of the property’s value.
At Mortgage Lane, we have access to lenders who are willing to provide mortgages to applicants from various countries, including Hong Kong and America. We understand the lending landscape and can find lenders who are comfortable with international applicants.
When applying for a mortgage in the UK, lenders will review your credit history. For American applicants, this involves considering your credit history in the United States. A strong credit history in your home country can positively influence your application by demonstrating financial responsibility and creditworthiness.
We at Mortgage Lane are adept at presenting your financial background to lenders in a favourable light. We understand how to highlight the strengths of your application, including your credit history, income stability, and financial assets.
We have significant experience with mortgage applications for foreign nationals, including those from America and Hong Kong, and are familiar with the challenges and requirements involved.
We match our clients with lenders who best fit their specific financial profiles, increasing the chances of mortgage approval.
We guide you through the entire process, helping with the collection and submission of necessary documentation.
We provide guidance on the legal and financial requirements for obtaining a mortgage in the UK, although we also recommend seeking specialized legal and tax advice.
Our goal is to find viable mortgage options for our clients. We maintain an optimistic and proactive approach, dedicated to overcoming hurdles in complex mortgage situations.
In summary, American residents and nationals can access buy-to-let mortgages in the UK. Mortgage Lane is committed to assisting clients from various backgrounds, including those from countries with lower money laundering risk ratings like Hong Kong, in securing mortgages for UK properties. Our expertise, extensive lender network, and client-focused approach enable us to navigate the complexities of the mortgage process effectively for our clients.
In December 2023, Hong Kong was graded 4.93/10 for global money laundering risk. The Basel AML Index, which assesses this risk, is a comprehensive ranking that measures the risk of money laundering and terrorist financing in countries around the world. It takes into account factors such as financial regulation, transparency, corruption levels, and legal standards.
A score of 4.93/10 places Hong Kong in the ‘green’ category, indicating a lower risk. Consequently, countries in the green category often have more mortgage options available to their residents and nationals because of the lower perceived risk.
Having no credit footprint in the UK will just mean slightly reduced options. A financial footprint typically refers to a record of financial activity and credit history within the UK.
There are indeed lenders in the UK that may offer mortgages to overseas buyers without a UK footprint, although the options are relatively limited compared to what’s available to residents and overseas buyers with an established UK credit history. Here are some key points about such lenders:
Specialist Lenders: These are typically smaller banks or financial institutions that specialise in lending to foreign nationals or expats. They may have more flexible criteria than high street banks.
Due to the perceived higher risk associated with lending to someone without a UK financial history, these mortgages often come with higher interest rates and require a larger deposit, sometimes up to 20-40%.
Due Diligence and KYC (Know Your Customer) Procedures: These lenders will have rigorous due diligence processes. They will need to verify the identity of the borrower, their creditworthiness, and the legitimacy of their income sources, which can sometimes be challenging with overseas income and translations.
Some lenders may accept international credit reports or work with credit agencies that can provide a global credit check.
While a full UK footprint might not be necessary, some lenders may require the borrower to open a UK bank account for managing mortgage payments.
Brokerage Services: As a mortgage broker, Mortgage Lane can provide invaluable service by navigating these complexities and finding the right lender for your client’s specific situation
A “day one mortgage” allows you to remortgage your property without the traditional waiting period. Historically, many buy-to-let lenders adhered to a “six month rule”, which posed challenges, particularly for investors employing the Buy, Refurb, and Refinance (BRR) strategy. If you’re an investor looking to capitalise on this approach, the good news is you no longer have to wait 6 months to remortgage the property based on its updated post-refurbishment valuation!
Yes, some lenders offer a 10% overpayment facility, per annum.
This means that if your principal loan was £125,000 then you could repay £12,500 per annum as an overpayment without incurring a penalty within your fixed term.
However, it is important to note that many lenders are stripping this from their product ranges, so it is always worth checking to avoid paying exit fees on amounts repaid.
Yes. However, it is not advised, especially if you are buying in a traditional auction with just 28 days to complete. Traditional auctions are more generous on time, but if you are buying via the traditional auction route then it is unlikely you will get a mortgage offer and subsequently, legal searches of which some councils are taking over 6 weeks to return. Bridging loans may be a more suitable form of finance for foreign nationals buying property at auction.
We assist our clients with buy to let mortgages in England, Wales, Scotland and Northen Ireland.
Not always, but many lender do insist on them.
A processing agent is an individual or company in the UK that acts as your agent in the UK so that lenders are able to successfully serve paper work to you, this de-risks the legal process for lenders involving repossessions and general correspondence in relation to arrears or changes to the mortgage account.
Please see our page on Processing Agents.
Yes, as an Australian, you can obtain a mortgage in the UK for a buy-to-let property. Mortgage Lane, as a broker, can play a vital role in facilitating this process for you.
We have established relationships with various lenders who are comfortable providing mortgages to foreign nationals, including Australians. We can identify those most likely to approve your application based on your specific circumstances.
We can guide you through the specific requirements and criteria set by these lenders, which may differ from those for UK residents.
Organizing the necessary paperwork can be challenging, especially when it involves foreign income and credit history. We can help you compile and present your financial information in a way that UK lenders will accept and understand.
We can assist in presenting your income evidence, whether it’s from employment or other sources, in a manner that aligns with UK lenders’ requirements.
We’ll help you understand how exchange rate fluctuations can impact your mortgage and rental income, and ensure that the potential rental income meets the lender’s criteria.
While we are not legal or tax experts, we can direct you to the appropriate professionals and ensure you’re aware of the legal and tax obligations of owning a buy-to-let property in the UK.
Credit Check Process for Australian Applicants
If you have a UK credit history, lenders will review it as part of the application process. However, as an Australian, it’s likely you may not have this.
Some UK lenders may consider international credit reports. We can help identify lenders who accept these reports and assist in obtaining one from Australia.
In the absence of a UK credit history, lenders might look for alternative ways to assess your creditworthiness. This could include reviewing your banking history, asset ownership, or credit status in Australia.
We can help identify lenders who are comfortable offering mortgages to international clients, including Chinese nationals. Not all lenders may have the facilities to handle international applications, so our expertise can save you significant time and effort.
Different lenders have different criteria for foreign nationals. We can guide you through these requirements, ensuring that you meet them effectively.
We can help you gather and present the necessary financial documentation in a manner that is acceptable to UK lenders, including converting documents into English where necessary.
We will assist you in understanding how exchange rate fluctuations between the Pound Sterling and the Chinese Yuan might affect your mortgage payments.
If you don’t have a UK credit history, we can advise on steps to start building one, if applicable, or find alternative solutions.
We can point you towards legal and tax advice specific to your situation as an international investor in the UK property market.
If you have an existing credit history in the UK, lenders will review it as part of the application process. However, most Chinese nationals may not have this.
Some UK lenders may accept or request an international credit report from China. This provides a history of credit use and repayments, though not all UK lenders are equipped to interpret these reports.
In the absence of a UK credit history, lenders will likely scrutinise bank statements and financial records to assess your financial stability and ability to repay the mortgage.
Proof of income is crucial. This might include salary slips, tax returns, or other documentation that proves your income in China.
Lenders may evaluate your assets, including those in China, to determine your financial stability.
Any existing debts or liabilities in China will be taken into account to understand your overall financial commitments.
Applications from foreign nationals are often subject to more manual underwriting processes, which can take longer and require more detailed financial analysis.
The lender will consider the impact of exchange rate fluctuations on your income, especially if it is in Yuan, and your ability to meet mortgage payments in Pounds.
As part of anti-money laundering checks, you will need to provide identification and proof of residency.
Yes, as a resident and national of America, you can obtain a buy-to-let mortgage in the UK. Here’s an overview of the process and how Mortgage Lane can assist you:
In the UK, buy-to-let mortgages for foreign nationals, including Americans, typically have Loan to Value (LTV) ratios ranging between 65% and 80%. This means that you would be expected to provide a deposit of about 20% to 35% of the property’s value.
At Mortgage Lane, we have a network of lenders who are inclined to provide mortgages to applicants from America. Our familiarity with these lenders’ criteria and requirements makes us well-positioned to facilitate your mortgage application process.
When applying for a mortgage, UK lenders will review your credit history. For American applicants, this includes considering your credit history in the United States. A strong US credit history can be a significant advantage in your application, demonstrating financial responsibility and creditworthiness.
At Mortgage Lane, we specialise in showcasing the strengths of your financial profile to potential lenders. This involves strategically presenting your credit history, income stability, and other financial credentials.
We have extensive experience handling mortgage applications for foreign nationals, including Americans, and understand the nuances and challenges involved.
We tailor our lender recommendations to suit your specific financial situation, thereby enhancing the likelihood of securing a mortgage.
We guide you through the process of gathering and preparing the necessary documentation for your mortgage application.
We can provide guidance on the legal and financial aspects of obtaining a mortgage in the UK, though we always recommend also seeking specialised legal and tax advice.
Our approach is centred on finding viable mortgage options for our clients, regardless of their nationality or residence. We maintain a positive and proactive attitude, aiming to overcome any potential challenges in the mortgage application process.
Mortgage Lane specialise in assisting overseas clients who are interested in buying property in the UK for buy-to-let or commercial purposes. A common question we encounter is whether there are lenders who provide mortgages to individuals without prior property management or investment experience.
Yes, there are lenders who do not require previous property management or investment experience. At Mortgage Lane, we work with a variety of lenders, some of whom are flexible regarding the experience level of the borrower. This is particularly beneficial for first-time investors or those new to the UK property market.
It’s important to note, however, that while some lenders we work with do not require experience, others might. These lenders often assess the risk based on the borrower’s experience in managing property, especially for buy-to-let or commercial investments.
Most lenders, including those willing to work with inexperienced investors, will require a UK bank account but there are lenders that exist that do not require a total footprint with credit history.
As your broker, our role at Mortgage Lane is to guide you through these requirements. We help you understand the lender’s criteria, assist in building a UK financial presence if necessary, and match you with the right lender based on your unique circumstances.
We understand that buying property in the UK as an overseas investor comes with its unique set of challenges. Our expertise lies in providing tailored services that cater to your specific needs, whether you’re an experienced investor or venturing into the UK property market for the first time.
An interest only expat mortgage is a mortgage, where you will only repay the interest on the principle amount borrowed. This can be useful for investors on buy to let mortgages, whereby they build this into their cashflow. However, for residential mortgages it requires more planning as “sale of security” isn’t so much of a widely accepted exit strategy for mortgages on primary residence.
A buy to let mortgage is used to purchase a property that you intend to rent out to a residential tenant on one tenancy agreement. Usually people take Interest only but capital repayment buy to let mortgages are also available for foreign nationals.
No.
Some may have a minimum income of £35,000
Historically more lenders did have a minimum incomes for Buy to Let mortgages, however, more do not. There are still a few that require a minimum income, but rest assured that if you are earning below £35,000 there are plenty of buy to let mortgage options out there for you.
We arrange cost-effective BTL mortgages for:
- Individuals
- Special Purchase Vehicles/Limited Companies
- Limited Liability Partnerships (LLP)
- Trading companies
- Charities
- On/Offshore Trusts
It is important to note that Buy to let mortgages are not covered by the Financial Services Compensation Scheme, so borrowers should ensure they are dealing with a reputable lender.
TITLE RELATED TO BLOGS ON MORTGAGES
At Mortgage Lane, we see the most complex of foreign national mortgage applications, some of which make a good read for investors looking to learn from other applicants challenges, or for those effected by the topics! See more buy to let mortgage topics covered in our blog here.
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