Expat Mortgages in Dubai: 15 Questions Answered
Due to continued demand from expats based in the UAE and the Middle East in general who is considering acquiring a mortgage in the UK, I have created a list of Frequently Asked Questions (FAQs) that can assist with many of the initial points facing expats and expat mortgages.
Expats are becoming increasingly aware that they are typically deemed as ‘high risk’ by UK lenders and that they, therefore, need mortgage advice from industry experts who have established relationships with the relevant lenders.
Here are answers to some of the most frequently asked questions regarding expat mortgages:
1. Does it matter that I live permanently overseas?
No, expat mortgages can be obtained whilst you are permanently based overseas. It is important to speak to a knowledgeable broker who can obtain a Mortgage in Principle before you start to submit offers.
2. What if my income isn’t paid into the UK/ in a foreign currency
This isn’t typically a problem; banks will usually convert to sterling for their affordability assessments. Many lenders will accept foreign accounts and currency, however, you must be able to obtain original, certified bank statements for up to 6 months. What makes a great broker is someone who has a currency expert on hand for you to consult whilst determining this part of your purchase, as currency risk can form a huge part of your investment.
3. What kind of mortgage can I have?
There is usually no limit to the kind of mortgage you can have, be it repayment, interest-only, or a combination of the two. You can also look to purchase under a residential mortgage in some circumstances; however, buy-to-let is the most common product used.
4. Does it matter whom I work for?
Working for a multi-national company certainly opens the door to a few more lenders. However, it is not mandatory.
Self-employed applicants can also be considered, subject to audited accounts of a minimum of 2 years, audited by a recognised global accountant. An experienced broker will be able to guide you through this.
5. What if I can’t be in the UK to sign documents?
Many documents can be posted, emailed, faxed, or electronically signed. You should not have to return to the UK to sign a document.
6. What kind of documents might I need?
Typically for expat mortgages, you would need a passport, proof of address, bank statements, payslips, employment reference and proof of deposit.
An experienced broker should be able to advise you on which documents can be used and guide you through the next steps if they are unable to be produced.
7. What are the timescales?
It is often the impression of the typical overseas client that expat mortgages can take “3-6 months” to complete. If you use a proactive, experienced broker who obtains all your documentation upfront, this should not be the case.
8. I’ve been outside of the UK for many years (5 years+). Will this affect my obtaining a mortgage?
This shouldn’t be an issue, there are a wide number of lenders who will accept applications for people who are long-term expats. It is important to speak to a whole market broker who will have access to all of these lenders.
9. What kind of deposit can I put down?
Deposits can be as low as 15%, however, this is only for a limited number of lenders — a good starting point would be 25% which means you have the “pick of the market” so to speak
10. I’m looking to begin a buy-to-let portfolio, can I do this whilst overseas?
Absolutely. Expat mortgage brokers should be able to guide you through this process and be mindful of the distance and what limitations that may bring. It is important to bear in mind the tax implications, therefore your broker should have a tax specialist on hand for you to deal with this.
11. I want to buy a home to live in eventually, however, my intention is to rent it out in the meantime. Can this be done?
This is often the circumstance as clients want to eventually return to the UK. A broker can position this with a lender and put in a proactive application with a view to renting the property out under a consent-to-let agreement, whilst you are overseas.
It is important that you have a great relationship with your broker and you review your plans regularly. As your intentions change, so must your mortgage(s).
12. How much can I borrow?
This is often the first question asked and being able to explain the specific affordability criteria in a way that’s relevant to you is the strength of a good broker. A number of factors used against assessing affordability are;
i. “Provable” income minus commitments.
ii. Multiples of rental income potential vs monthly mortgage payments
iii. Credit scores
13. I’m concerned about what happens if I die, can I be covered for a UK mortgage whilst living in the UAE?
Your broker should put you on the road to financial success and if for any reason you were to pass away, ensure that your family is in a position of financial strength. It is not only about planning on what is happening today, it is about ensuring that plans always take into account tomorrow, too.
14. What about legal etc?
There are a number of conveyances that will accept overseas clients. If a broker has a good working relationship with a panel, this will put you in a position of strength with your application. Solicitors’ fees can be increased when they discover clients are overseas, and could also delay proceedings.
15. I’ve had the experience of buying a house before and I don’t really want a call centre dealing with everything.
Find a broker who will deal with your mortgage from start to finish. A call centre will often not understand your individual, exceptional circumstances, or give you a number of methods to contact them whilst overseas (Skype, mobile numbers, office numbers, email etc.)
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About Mike Coady
Mike Coady is an expat expert based in Dubai and is on hand to help with all of the above and more.
Mike is an award-winning money coach and industry leader in the financial sector.
Qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Founding Fellow of the Institute of Sales Professionals (FF.ISP), and a Fellow of the Institute of Directors (FIoD) and featured as a highly qualified Financial Adviser in Which Financial Adviser.
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Blog published by Mike Coady.