If you’re an expat in the UK, here’s a guide on how can you get a mortgage to buy a UK property. Find out what credit score is really needed to buy a house in the UK.
The simple answer to this common question asked by British expats is no. It is not essential to have a UK credit history in order to raise a UK mortgage. This guide also offers three quick tips on how an expat can create and improve their UK credit score.
Having a current or previous UK credit history is not a pre-requisite to obtain a UK mortgage. However, it can allow an expat to secure more competitive and flexible mortgage terms than those on offer by an offshore or international lenders who generally don’t require a credit check.
Stuart Marshall, Business Development Director of Liquid Expat Mortgages, provides an insight into this often misunderstood issue. He also provides several examples of how a UK credit history can help, as well as ways an expat can improve it.
Getting a UK mortgage
If you’re looking to invest in a UK property with a mortgage, then it isn’t essential to have a credit history. The key reason for this is because most UK and offshore lenders only require your address history for the last three years. Many expats have worked overseas for at least this length of time; thus, finance companies cannot run a credit check through the likes of Experian or Equifax.
Obviously, foreign nationals who haven’t lived in the UK don’t have a historical credit file. Offshore banks and lending institutions recognize this fact in their application and underwriting procedures. Liquid Expat Mortgages helps clients from around the world secure UK mortgages, even without a connection to the UK. The mortgages arranged for expat clients are both buy to let, main residential, and self-build mortgages.
The UK credit history is important when an expat has lived in the UK at any point in the last three years. Moreover, many expats may still have an existing UK address they continue to keep as their banking correspondence address, and as such, allow UK lenders to credit search them at this location and fulfill the lenders credit scoring procedure. Many expats keep their parents address as a UK banking address for their correspondence. This helps clients that want to get on the UK property ladder and are looking for lenders without a minimum loan amount and arrangement fees of 1%; many offshore and international banks charge these.
UK mortgage providers can make the application process quicker for expats. They’ll likely have lower arrangement fees, more competitive interest rates, and a wider choice of availability.
Three quick tips on how expats can create and improve their UK credit score
1) Either maintain a UK address for banking correspondence or reinstate one back in the UK. This allows a UK lender to credit score your application at a UK address and broadens your mortgage options.
2) Before you apply for UK credit, get a copy of your credit file from either Experian, Equifax, or CallCredit. All three offer instant access to your statutory GBP 2 credit report online. You simply need to complete an application on their websites and you will instantly have access to your credit file. Feel free to forward this to your mortgage broker so they can understand any potential issues before applying.
3) Dealing with any late payments or previous CCJ’s. If you miss a payment, then you can apply for a notice of correction on your credit report. This is a 200-word statement which explains why payments were missed. For example, they have always met repayments on time in the past but moving or working overseas meant they had a period when their hectic life meant one or two repayments got missed. You must explain that now that you work abroad, all financial commitments for repayments are in order.