FOREIGN NATIONALS
Foreign National Mortgage - Residential
The UK Property Market.
We understand the landscape of the property market in the UK is very attractive to international clients. The UK offers great capital growth, strong rental yields and of course purchasing property in one of the worlds strongest economies all adds to the appeal.
Obtaining funding for foreign nationals living abroad trying to obtain a mortgage in the UK can prove difficult without the correct contacts and experience.
HOW TO GET A MORTGAGE IN THE UK
Lending to Foreign Nationals can be complex and is a niche market space. We provide our International clientele with expert advice.
To allow you to understand what the process looks like and what information we will need, we have outlined a few points to consider.
The UK regulatory regime for many foreign nationals is one of the strictest in the world and deemed as a higher risk. Navigating this on your own or without the right broker can end up wasting time, money and effort. You will find background checks for foreign nationals are generally more in depth than those required by UK residents.
Of course if you are early on in journey and just need some financial advice and structure, feel free to contact us. In the meantime, these are the things to consider:
Your deposit – what level of deposit will you have to put down and what is the source of it. Deposit size will generally be linked to level of risk and interest rate we can get.
The Location – most lenders prefer prime London, however we have specialist lenders that will look at city centre location if the reasoning is justified.
The Reason you are buying – are you looking for to buy property in the UK as an investment and require buy to let mortgages, or somewhere you and your family can stay when they come to the UK?
Your Income – as with any lending, understanding what your income is, how it structured and paid and where it is paid will all contribute to a successful application. Each case is reviewed based on your own circumstances.
Your overall Net Worth as a client – This will really come into play when you are purchasing in Prime London. We will need to understand your overall asset and liability position to ensure we approach the correct lenders.
Foreign nationals thinking of obtaining property finance in the UK, should also consider:
- If they have an international or UK bank account.
- Where will their mortgage be paid from? Most lenders will require direct debits for the mortgage to be set up from a bank account in the UK.
- Your credit history / credit score in the UK or in your country of residence – UK citizens have credit history showing lender how they conduct their financial affairs and other debts in the back ground. This gives lenders a good insight into the risk profile of a client.
- Your employment status – If you are employed or self employed – do you have a permanent job in your home country or a good stable business?
- Asset / Investment portfolios – These will need to be discussed to allow us to offer a wider range of products for you.
Assets Under Management
Some lenders may request to have Assets Under Management (AUM) but we are finding that the market is becoming increasingly competitive and many lenders are now happy with a more softer approach.
We have helped foreign national living in the UK from the European Union, India, Pakistan, China, United Arab Emirates, Singapore, Malaysia, Vietnam, Mexico, America and Australia who have all had their own individual circumstances obtain financing in the UK.
Foreign National Mortgage Rates.
As with mortgages for UK residents, rates will differ based around your individual circumstances. UK Nationals also have to meet lender criteria to get the best deal.
Mortgages for foreign nationals in the UK will vary on your loan to value (money you are borrowing, against the property value), your income, the type property you are buying, the location of the property, your country of residence, if you have a work permit or you are here for business, if you have indefinite leave to remain and may other factors.
Sharing your personal information, with an expert broker who can understand the make up of your financial position will help us get a mortgage for you, and provide you options with different lenders, including interest rates, mortgage repayments, costs involved with arranging your mortgage, the mortgage application process and timelines.
Generally rates are quite low in the current market from Private and Specialist banks. With our strong relationships and network, we are able to offer our clients the right solution and favourable terms.
Foreign Nationals - Investment
At London-FS we fully understand Investment purchasing and refinancing in both your personal name and in a Special Purpose Vehicle (SPV) for Foreign National Clients.
We would need to understand your overall client proposition – this allows to narrow down the right lender for you. As part of service to secure you the best lending terms, we also work with you to ensure you are purchasing a strong asset for the future.
We can help with confirming rental valuations, working out your net yields and even with negotiations if need be on your behalf.
Our services for Foreign National Investors is to work with you to ensure it is the right way for you to purchase or grow your portfolio in the UK and is not simply based on the rates/terms that we will secure for you.
We are happy to work with your accountants / personal representatives / solicitors to ensure you are guided through the process.
Many foreign investors find a mortgage is actually more advantageous than buying in cash. Mortgages allow you to keep hold of your assets rather than selling them to buy the property outright. You may find purchasing a property with an overseas mortgage offers some taxation benefits, too.
With record low mortgage rates, mortgages can make a lot of sense from a financial perspective, too. And because London is such a magnet for foreign investors, it’s usually easy to secure a mortgage from lenders, even if you’re not based in the UK.
Mortgages can also be a great option if you’re looking to renovate or develop an investment property as you’ll have more of your own funds to spend on refurbishment. Alternatively, you can borrow to cover part (or the entire cost) of the project.
Do Foreign Nationals Pay Stamp Duty?
Yes. The Overseas Buyer Stamp Duty (also known as the Overseas Buyer Surcharge). The surcharge came into force in April 2021 and effectively means that foreign buyers will pay additional stamp duty on any UK property they purchase.
The Overseas Buyer Surcharge will cost the equivalent of 2% of the property price.
The Overseas Buyer Surcharge comes in addition to the Stamp Duty on Second Home surcharge. If you already have a property in the UK (i.e., you’re buying a second property or have several investment properties), you’ll now need to pay an additional surcharge on every additional property you buy. The stamp duty rate on second homes depends on the purchase price of your property and is due in addition to the overseas buyer’s surcharge.
BOOK A CALL WITH A MORTGAGE BROKER
Speaking to a mortgage broker couldn’t be easier. We always advise speaking to an advisor well in advance. This gives us both an advantage to plan and ensure your mortgage application is correctly processed. It also allows us to plan and help you organise your finances (if need be).
it is important to ensure you check the broker you are dealing with is directly registered and authorised by the Financial Conduct Authority or is an appointed representative of a firm that is.
If you would like an informal chat with a mortgage adviser, please use the contact form on our site, drop us an email: enquiries@london-fs.com or give us a call +44(0)208427 5057.
We can run you through what paperwork will be required, discuss any questions you may have about obtaining a mortgage or you may just want a professional, independent opinion on the property you are buying. In any instance we can help.
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