Expat Banking and Finance


Mortgage Demand from British Expats Soars

by Ray Clancy on January 29, 2015

British expats seeking a UK mortgage should not be down heartened by reports that they are considered high risk by lenders and therefore often turned down, it is claimed.

Many complain that they have difficulty securing a mortgage as they have a lower or non-existent UK credit rating as they have lived outside the UK, have earnings in a different currency and worked for non UK based firms.

But demand for home loans from expats has never been higher, according to the deVere Group, which has 80,000 mainly expat clients globally. Now it has launched a new brand to cope with this demand. deVere Mortgages, which is launched by Financial Conduct Authority regulated deVere United Kingdom, is aimed at overseas based clients.

‘After identifying consistently increasing demand for our independent, whole of the market mortgage advice and protection services, the decision was taken to establish deVere Mortgages, an independently-run division of deVere United Kingdom,’ said Mitch Hopkinson who will oversee the mortgages team.

‘This new proposition, which is backed by the significant resources of a robust and responsible organisation and managed by a team of senior industry professionals, will enable us to better serve our existing and potential expat clients and further extend our already broad scope of mortgage offerings,’ he pointed out.

Despite recent reports of a cooling UK housing market, deVere has registered a month on month rise in mortgage enquiries over the last year and it has forecast this upward trend to continue and increase further.

‘Demand for our mortgage advice is fuelled primarily from people living overseas or returning British expats who, because they live and work abroad, would typically be branded as high risk by UK lenders,’ explained Hopkinson.

‘We believe other possible contributing factors in this soaring demand for our independent mortgage advice from expats include the tougher rules for securing mortgages, rising house prices, the possibility of rising interest rates, plus the uncertainty prompted by the general election and global economic growth concerns,’ he said.

‘All these factors create a more challenging mortgage environment, and it would seem that expatriates seeking to secure a home loan in Britain are now increasingly aware of the need to seek highly specialist mortgage advice from industry experts who have established relationships with the relevant lenders,’ he added.

The firm said it obtained a mortgage agreement for 95% of its expat clients who applied in 2014. Now it plans to increase the volume of mortgage business by up to 300% in 2015.

‘Even in today’s tougher mortgage environment, it’s our experience that if expats follow certain criteria, mortgage approval should not be any harder for expatriates than for UK residents,’ said Kevin White, head of UK Financial Planning at deVere United Kingdom.

‘These criteria include being seen to have both local and international bank accounts that are relatively stable; demonstrating that they have committed to saving a decent deposit; and hiring the services of an English speaking public notary or lawyer who can certify documents locally,’ he explained.

However, he pointed out that expats also need to consider two important additional factors, which non-expats would not necessarily need to, before signing on the dotted line; interest rates and fees.

‘Expats need to be careful that interest rates are in the currency they want the mortgage in. For instance, a mortgage in sterling for a client earning in Dirhams (UAE) could mean the mortgage payment goes up as and when currencies fluctuate,’ said White.

‘Expats must also make sure they are not being charged additional fees because of their offshore status. We have seen mortgage brokers charge up to 1.5% of borrowing because they are an expat. I’m confident with the right advice and the following some fundamentals, there is no need for British people living overseas to be left out in the mortgage wilderness,’ he added.

 

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