If you’re a British expat looking to purchase property in Scotland, you’ll need to navigate the unique challenges of securing a mortgage from overseas.

Unfortunately, getting a mortgage for a property in Scotland as an expat is even more difficult than it is for a property in England. There are less lenders that operate in the space, meaning there’s less competition between banks for your business, and there’s a more strenuous application process involved.

However, there are lenders in the market that can lend against Scottish property to expats.

In fact, one high street lender recently expanded their criteria to facilitate Scottish property as recently as May 2024, which opens more doors and options for expats.

At UK Expat Mortgage, we specialise in arranging mortgages for expats buying properties in Scotland, and we’ve got years of experience under our belts in doing it.

In this article, we’ll cover everything you need to know about expat mortgages for Scottish properties. We’ll explore the eligibility criteria, the application process, and the key factors that lenders consider.

Note: You’re likely to need a mortgage broker to support you with your application and find an appropriate lender and product for your circumstances. To speak to an expert about your options and how we can help, please don’t hesitate to get in touch.

Case Studies

Eligibility Criteria for Expat Mortgages for Scottish Property

Lenders have specific requirements that you’ll need to meet, and understanding these upfront can save you a lot of time and effort.

Employment and Income

Lenders will scrutinise your employment status and income to determine your ability to make mortgage payments. If you’re employed, you’ll typically need to provide proof of employment, such as a contract or payslips. If you’re self-employed, you’ll need to furnish tax returns and financial statements that demonstrate a stable income.

Depending on the currency you earn in, the country you live in, and your type of employment, these requirements will vary – and it also depends which lender you’re applying to and they each have their own processes.

Deposit and Credit History

Like any mortgage, you’ll need to have a sizable deposit – usually at least 25% of the property’s value. Lenders will also review your credit history to assess your financial responsibility and ensure that you’re a low-risk borrower.

Application Process for Expat Mortgages for Scottish Properties

Now that you know the eligibility criteria, let’s walk through the application process for an expat mortgage in Scotland.

Finding the Right Lender

Not all lenders offer mortgages to expats, and unfortunately even fewer lend against Scottish property. They don’t advertise this information on their websites – it’s industry knowledge that can be difficult to access. That’s where we come in – our team at UK Expat Mortgage will scour the market to find the best lender for your specific circumstances.

Gathering Documentation

Once we’ve identified a suitable lender, you’ll need to provide a range of documentation to support your application. This typically includes proof of identity, proof of income, bank statements, and details about the property you’re interested in purchasing. We will help you through this step-by-step.

The Underwriting Process

After submitting your application, the lender will conduct an underwriting process. This involves assessing your financial situation, employment history, and credit score to determine your risk level and the appropriate mortgage terms.

We have good relationships with underwriters and can package your application favourably, and contact them directly to explain any nuances in your situation.

Key Considerations for Expat Mortgages

While the application process is similar to a standard mortgage, there are a few key considerations that are unique to expat mortgages.

Currency Fluctuations

If you’re earning income in a foreign currency, fluctuations in exchange rates can impact your ability to make mortgage payments. Lenders will typically require you to have a stable income in a major currency, such as US dollars or euros.

Even so, they’ll usually apply a ‘hair cutting’ deduction to account for currency fluctuations to your income levels: typically 20%. So, you may need to deduct around 20% of your income when considering your borrowing power in the UK – we can help you negotiate the best rates for this.

Tax Implications

Depending on your residency status and the country you’re living in, there may be tax implications associated with owning property in Scotland. It’s crucial to seek advice from a qualified tax professional to ensure you’re fully compliant.

Property Management

If you’re purchasing a buy to let property in Scotland, you’ll need to consider how you’ll manage it from overseas if your family isn’t going to be living there. Many expats choose to hire a property management company to handle day-to-day tasks like tenant screening, maintenance, and rent collection if you’re choosing to rent it out.

Why Choose UK Expat Mortgage?

At UK Expat Mortgage, we pride ourselves on our expertise in arranging mortgages for expats buying properties in Scotland and the rest of the UK. We understand the unique challenges you face, and we’re committed to making the process as smooth and stress-free as possible.

Our team of experienced mortgage advisors will work closely with you to understand your specific circumstances and find the best mortgage solution. We have strong relationships with a wide range of lenders, giving us access to competitive rates and flexible terms.

But don’t just take our word for it – check out our case studies from satisfied clients who have successfully navigated the expat mortgage process with our help.

Contact us today to start your expat mortgage journey.