Posted on 4 May 2016 by James
"I am currently an expat (been overseas for 6 years). If I return to the UK, I want to buy a family home worth £350,000. I will have a deposit of £120,000 plus enough to cover fees and stamp duty. How much would I need to earn to secure a £230,000 loan? I also own 3 UK buy to let's and have £250,000 in equity. If my earnings were too low for the £230,000 loan, could I give the bank a second charge on these properties to help me secure a mortgage for the family home? Finally, how long would I need to be back in the UK for to get a mortgage for a family home? I have maintained a UK current account and 3 buy to let mortgages whilst being away."
Thank you for your question, via our ‘Ask the Expert’ section of our website.
The possibility of you obtaining a mortgage would depend on a number of factors. The main one being in your case is knowing when you are planning to return to the UK and what your employment situation will be when you do.
You are looking to borrow £230,000 on a purchase price of £350,000. Typically, you'd need around a 25% as a deposit level for an expat mortgage, and you are well below this threshold, which puts you in a good position to proceed with this type of transaction. It's worth mentioning that as with most mortgages, the more money you can put in the potential better access you may have to more lenders and a better rate.
As an ex-pat there are a good number of lenders who are still active in this sector, and we can certainly look to assist you in getting a mortgage, though we would need to know the exact figures (joint income, rental income, etc...) before being able to say 100%. As a rough guide, in the current market you can achieve around 4 times your gross income, subject to lending criteria and affordability calculations.
The fact that you already have a 3 BTL properties in the UK, is not a hindrance, in fact it can be viewed as a positive. The majority of lenders in the ex-pat arena prefer that you have some sort of credit profile / history in the UK, as this gives them a greater degree of comfort when making the decision to lend.
There is no minimum timeframe required for returning ex-pats and there are lenders who will consider this situation. Having an active current account helps towards your ‘credit profile ‘and gives the lender greater confidence should they decide to lend.
It may be possible to do a straight purchase a property before you return, but this may limit the number of lenders open to you. Alternatively you may be able to release equity from your BTL properties and use these funds to purchase a property. Your John Charcol adviser will be able to talk you through the most appropriate solution for your needs.
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Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.