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Mortgage for purchasing a UK Property Whilst Abroad

Mortgage for purchasing a UK Property Whilst Abroad

Old Jan 21st 2016, 9:16 pm
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Default Mortgage for purchasing a UK Property Whilst Abroad

Hey everyone, I'm hoping someone might be able to give some advice about obtaining a UK mortgage whilst living abroad.

I'm currently living in the US and expect to return to the UK at some point in the next 5 or so years. In the meantime, I'm very keen to purchase a property back home so that I can get myself on the ladder.

Thankfully my father lives close to the area that I'm looking to buy in and he's happy to handle much of the face to face work - my only issue is trying to obtain a mortgage to fund it.

I wanted to ask if any of the esteemed readers of this site have had to arrange UK mortgages and, if so, what pitfalls they ran into, if there are any particular mortgage companies that they'd recommend for my situation, or any other useful info you may have.

Just to provide some background - this would be my first home purchase. I have essentially no other debt and would be putting forward approx 25% as a deposit.

Through my family I've been in touch with a broker that's struggled to get anyone to lend to me - given that I'm out of the country and have a salary that's split between the US and the U.K. Does anyone have any tips / experience / recommendations that may help?

Thanks.
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Old Jan 25th 2016, 3:36 am
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Default Re: Mortgage for purchasing a UK Property Whilst Abroad

As you seem to be in the US, I'll move this over to the USA section. You may get more response in there.

There was a thread about this topic in our Middle East section which you may find a little helpful.
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Old Jan 25th 2016, 3:57 am
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Default Re: Mortgage for purchasing a UK Property Whilst Abroad

I have no personal experience, but everything I have read and heard is that over the past decade, getting a mortgage in the UK while living overseas has gone from challenging to difficult, to almost impossible.
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Old Jan 25th 2016, 4:44 am
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Default Re: Mortgage for purchasing a UK Property Whilst Abroad

Use your UK income?
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Old Jan 25th 2016, 6:21 pm
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Default Re: Mortgage for purchasing a UK Property Whilst Abroad

You may have to pay US capital gains on the property when you leave in 5 years? Can you take out a loan on your US property? But then your are playing the exchange rate game, but rates favour the dollar at the moment. If you take out the mortgage in GBP your payments will be subject to the exchange rate fluctuations. If you want to sell and buy something else you may need to do a 1031 exchange
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Old Jan 25th 2016, 6:41 pm
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Default Re: Mortgage for purchasing a UK Property Whilst Abroad

Originally Posted by Pulaski View Post
You can't do a s1031 exchange on non-US property, not even to switch it with other non-US property.
That's different to what my 1031 exchange person told me. She said I would have to buy another non-US property . I just couldn't sell US property and buy non-US and vice versa. I think people use 1031 for exchanging overseas vacation homes.

Special rules for foreign real and personal property
For purposes of this section—
(1) Real property
Real property located in the United States and real property located outside the United States are not property of a like kind.

Last edited by mrken30; Jan 25th 2016 at 6:43 pm.
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Old Jan 25th 2016, 6:54 pm
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Default Re: Mortgage for purchasing a UK Property Whilst Abroad

Something else to consider, 5 years is a long time. You might meet someone and decide you want to stay in the US. Then you will have the hassle of dealing with selling a property overseas and dealing with taxes and FBAR. Not a big deal but something to think about. Also some prices in the US have moved up more quickly than prices in the UK
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Old Jan 25th 2016, 6:55 pm
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Default Re: Mortgage for purchasing a UK Property Whilst Abroad

Originally Posted by mrken30 View Post
That's different to what my 1031 exchange person told me. She said I would have to buy another non-US property . I just couldn't sell US property and buy non-US and vice versa. I think people use 1031 for exchanging overseas vacation homes.

Special rules for foreign real and personal property
For purposes of this section—
(1) Real property
Real property located in the United States and real property located outside the United States are not property of a like kind.
You're correct. I thought I had read foreign-for-foreign wasn't allowed, but obviously I was mistaken.
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Old Jan 25th 2016, 10:53 pm
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Default Re: Mortgage for purchasing a UK Property Whilst Abroad

A buy to let mortgage may be an option. The 25% deposit is a good start, some indication of anticipated rental income from a letting agent would probably be needed.

If your father wants to manage the property you can save on the management fees which can be around 15%.
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Old Jan 25th 2016, 10:57 pm
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Default Re: Mortgage for purchasing a UK Property Whilst Abroad

Originally Posted by ottotheboar View Post
A buy to let mortgage may be an option. The 25% deposit is a good start, some indication of anticipated rental income from a letting agent would probably be needed.

If your father wants to manage the property you can save on the management fees which can be around 15%.
Also take into account the extra 3% stamp duty
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