There are a limited number of lenders that offer mortgages to British expats living in Denmark and buying property in the UK.
These expats may be looking to invest in buy-to-let properties or buy a home for themselves or their families.
Expats may have higher disposable income and want to invest in UK property. However, getting a mortgage as an expat has become more challenging due to regulatory changes that require stricter assessment of income and expenditure.
European rules introduced in 2014 and 2019 have made it more difficult for lenders to assess expat mortgage applications.
Exchange rate fluctuations must also be taken into account, which adds to the complexity of the lending process.
Despite these challenges, there are still options available for expats, including buy-to-let mortgages and residential mortgages for those who want their families to live in the UK property while they are abroad.
The application process for expat mortgages can be bureaucratic and may take around six to eight weeks.
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Types of Expat Mortgages
When it comes to obtaining a mortgage as a British expat living in Denmark and looking to buy property in the UK, there are several options available. The two main types of expat mortgages are buy-to-let mortgages and residential mortgages.
Buy-to-Let Mortgages for Expats
Buy-to-let mortgages are the most popular choice for expats, as they provide an opportunity to invest in UK property and generate rental income.
Certain approved currencies can be considered for income assessment, making it easier for expats to meet the lender’s requirements. This option provides greater flexibility for expats who may be earning income in a different currency while living in Denmark.
Residential Mortgages for Expats
While buy-to-let mortgages are widely available for expats, finding residential mortgages can be more challenging. However, there are still options for expats who want to purchase a home in the UK for themselves or their families.
These lenders require a minimum 20% deposit and assess affordability based on the usual criteria, taking into account the additional costs of living overseas and exchange rate fluctuations. While the options for residential mortgages may be more limited, there are still opportunities for expats to secure financing for their UK property.
How to Apply for an Expat Mortgage
When applying for an expat mortgage, it is crucial to have expert guidance to navigate the complex process.
We recommend working with a mortgage broker who specializes in expat mortgages, such as UK Expat Mortgage. We have the knowledge and experience to help you explore the available options and ensure that your application meets the criteria of lenders.
The criteria for expat mortgages may vary among lenders, but generally, they look for an existing UK mortgage, employment with a corporate employer earning at least £40,000 (or its equivalent), residence in a Financial Action Task Force country, and a good deposit. Even if you don’t meet these criteria, there are still mortgage options available, and a mortgage broker can assist in finding the right lender for your specific situation.
It is important to note that the application process for expat mortgages can take around six to eight weeks before receiving a mortgage offer. Therefore, it is advisable to start the application process well in advance to allow for any potential delays.
FAQ
What types of mortgages are available for British expats living in Denmark?
British expats living in Denmark have the option of buy-to-let mortgages, which allow them to invest in UK property and generate income, or residential mortgages if they want their families to live in the UK property while they are abroad.
How do buy-to-let mortgages for expats work?
Buy-to-let mortgages for expats require a minimum 25% deposit and rely on rental income to determine the borrowing limit. Most lenders require the rental income to exceed the mortgage payments by a ratio of 145% if the mortgage rate was 5.5%. Certain lenders may consider applications with rental shortfalls and accept approved currencies for income assessment.
What options are available for expat residential mortgages?
HSBC and Santander are two high street lenders in the UK that offer expat residential mortgages under certain conditions. NatWest International is also flexible in its approach to expat mortgages and requires a minimum 20% deposit. The affordability assessment for these mortgages takes into account the additional costs of living overseas and exchange rate fluctuations.
How can I apply for an expat mortgage?
It is recommended to work with a mortgage broker who specializes in expat mortgages. They can help navigate through the available options and ensure that the application meets the criteria of the lenders. The application process for expat mortgages can take around six to eight weeks before receiving a mortgage offer.
What criteria do lenders look for in expat mortgage applicants?
While criteria may vary, lenders generally look for an existing UK mortgage, employment with a corporate employer earning at least £40,000 (or its equivalent), residence in a Financial Action Task Force country, and a good deposit. Even if applicants don’t meet these criteria, there are still mortgage options available, and a mortgage broker can help find the right lender.