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Expats should review their mortgages in the UK

Recent comments from the Bank of England suggest that UK base rates could be heading lower in the short term. This seems to be based on the likelihood of a no-deal Brexit which is currently the central policy of the new Prime Minister Boris Johnson. While we have seen this type of speculation in the past, money markets are now indicating this is a very real possibility and one which expat homeowners may need to address. So, when is the right time to refinance your mortgage?

To say that we are in uncharted waters in the UK is an understatement to say the least. The 2008 economic downfall was like no other seen in living memory. The slow economic recovery could be described as “false” bearing in mind the amount of quantitative easing and historically low interest rates propping up markets. So, if we now turn our attention to the potential to refinance mortgages, when is the right time?

Today is the only certainty

If we take a step back and look at the situation from a distance, interest rates today are the only ones we can quote with any real certainty. Yes, the Bank of England has suggested falling the short term to cushion the blow of a no-deal Brexit. However, if you wind back just a few months there was speculation that UK base rates could be headed higher, so can we believe with any certainty what Mark Carney is saying?

As we mentioned above, the only definite interest rate is the one you see before you today. So, if you are considering refinancing your mortgage it is probably worth approaching a mortgage broker to see the best deals on offer. You would obviously need to take into account any additional charges, early redemption penalties, locked in interest rates and forecasts for the future.

Can we help?

If you are looking for a new or re-mortgage please do make contact and one of our fully independent advisers will be happy to assist.

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Expats moving fast into the buy-to-let market before Brexit

Brokers are reporting the largest number of buy-to-let mortgage applications from expats than ever before. This is not a surprise, in general the buy-to-let market is currently booming for all kinds of reasons.

Expats see this market as value for money, bank interest rates are low and there is real potential for capital growth on any re-sale and a better income than the banks are offering.

Interest in the UK property market has seen an up surge in viewings since the turn of the year. Estate agents up and down the country are reporting an increased interest in property at the lower end of the market from expats living abroad.

Are good deals for expats available?

Well, the simple answer to that is most certainly yes. Expats are always surprised at the very good rates that are available to them. Mortgage lenders currently are fighting to secure business in a very competitive marketplace, reducing both interest rates and fees.

Brokers have seen an increase in longer term fixed rate mortgages recently as clients want to know the outgoings of their investment property. Many other types of plans are on offer and it is prudent to consider all options before deciding.

It is commonly known with buy-to-let mortgages that the larger the deposit you can put down a lower interest rate can be achieved.

Need assistance?

Our professional independent advisers are used to dealing with all types of buy-to-let mortgages and they have vast experience in this area. Please do call to discuss your requirements and we will be happy to assist.

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Brand new range to help the expat

The Ipswich Building Society’s expat range is now available to applicants paid in foreign currencies, as those paid in pound sterling (GBP).

The new range consists of the following products and is available to direct applicants, intermediaries based in the Society’s heartland area, and members of selected networks and clubs:

• 2-year fixed rate at 3.10% until 30 September 2021 (5.4% APRC)

• 2-year discount rate at the Society’s Standard Variable Rate (currently 5.74%) minus 2.94%, giving a current pay rate of 2.80% for two years from the completion date (5.5% APRC)

• 5-year fixed rate at 3.34% until 30 September 2024 (4.9% APRC)

All products are available up to 80% loan to value (LTV) and have an application fee of £199, a completion fee of £800, a CHAPS fee of £35, and a tiered valuation fee based on property value applies. During the product period, the Society offers fee-free overpayments up to 50% of the original loan amount.

For overpayments in excess of 50% of the original loan amount, or early redemption, an Early Repayment Charge (ERC) applies. For overpayments this charge is calculated on the overpayment amount that exceeds the 50% allowance, and for early redemption is calculated on the original loan amount.

Loans are available from £75,000 to £500,000 with a maximum term of 40 years. Applicants must be employed by a recognised multinational firm and have a minimum income of £40,000 GBP or equivalent paid in any of the following 10 currencies: euro, Swiss franc, Norwegian krone, US dollar, Canadian dollar, Singapore dollar, Hong Kong dollar, UAE dirham, Kuwaiti dinar, Qatari riyal.

Affordability assessments will take into consideration employed applicants as well as retired borrowers, with 100% of pension and 75% of investment incomes used when calculating affordability.

Can we help?

If you are looking for a new or re-mortgage please do make contact and one of our fully independent advisers will be happy to assist.

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Interest rates are held, good news for Expats

The Bank of England’s monetary policy committee has voted unanimously to keep the base rate at 0.75%.

The rate has now been at this level for nearly a year, having been raised from 0.50% on 2 August 2018. The minutes reveal that the MPC has cut UK growth expectations for 2019 from 1.5% to 1.3%, and for 2020, from 1.6% to 1.3%. The MPC also believes that a no-deal Brexit would result in the sterling falling lower than its current levels along with CPI inflation increases and GBP growth slowing down.

Noting that core CPI inflation came in at 1.8% in June, the minutes add that if a “smooth” Brexit occurs and there is some global growth recovery, the committee “judges that increases in interest rates, at a gradual pace and to a limited extent, would be appropriate to return inflation sustainably to the 2% target.”

It adds that sterling would also rise in this situation.

In the accompanying inflation report for August, the bank revised several targets upwards for Q3 2019 – Q1 2020, namely that: expected mortgage approvals for house purchases was changed from 60,000 per month to 65,000 per month, the prediction that the UK house price index would fall by 1.25% in 2019 changed to rising by “just over” 2% in the year to Q1 2020, and that housing investment would fall by 0.50% per quarter would now fall by 0.25% per quarter.

Facts are we might have a new prime minister but the fundamentals in the UK remain the same, so this wait and see approach makes sense. The country is experiencing enough uncertainty and drama, with Boris Johnson reaffirming the threat of a hard Brexit, and the potential of a general election in the coming months.

The real worry is the strength of the pound, which has now reached a 31-month low. Regardless of the Bank of England’s actions, there will still be a downward pressure on sterling. A lower pound rate will benefit UK exporters, but will also raise the consumer price for imported items such as food and fuel. And since the UK is a net-importer, the poor exchange rate is going to be felt across the board.

Expat mortgages

As an expat if you are looking for a new or re-mortgage please do make contact and one of our fully independent advisers will be happy to assist.

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Expats should take note

Mortgage rates have plummeted since January, but would-be expat borrowers and re-mortgagers are being urged to strike now to take advantage of the competitive market.

Whether you are borrowing using a two-year deal, a five-year fix or even locking into a long-term 10-year fixed rate, prices are more attractive now than they were in January.

Indeed, the data analysts, revealed those borrowing money for their home using an average two-year fixed-rate mortgage this month will have paid an average rate of 4.2% compared to the 4.45% they would have been charged in January.

Five-year fixes, meanwhile, have fallen from a typical 4.33% in January to 4.1% today.

In fact, it’s much better to be a borrower than a saver as whilst prices are falling on mortgages, when it comes to savings the interest rates on offer have fallen since January too.

Borrowers urged to fix soon

The message from experts, for expats who might be waiting for prices to go down further, is to consider fixing their mortgage soon to take advantage of the deals currently on offer.

Interest rates are currently low but how long this trend will continue with Brexit looming is anyone’s guess.

Expat first-time buyers should keep a close eye on their finances and be mindful that with house prices on the rise in the UK, their dream of getting onto the property ladder may be further away than first thought. While interest rates are a convenient measure to compare deals, it is important that borrowers consider a mortgage based on the overall true cost, particularly to save on any upfront fees.

Seeking out independent financial advice is a good idea to navigate the mortgage minefield.

Can we help?

If you are looking for a new or re-mortgage please do make contact and one of our fully independent advisers will be happy to assist.

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Expats are getting wiser by the day

There was a surge in re-mortgage activity in April, May and June of this year, as expat borrowers look to lock into cheap deals ahead of an expected interest rate rise.

Since the financial crisis in 2008 mortgage rates have steadily fallen. The Bank of England cut interest rates in August 2016 from 0.50% to 0.25% – the lowest on record and the first interest rate cut since 2009 when the financial crisis was at its peak. This led to a number of lenders slashing their rates and competition in the mortgage market heating up.

However, with the Bank of England hinting that it could raise interest rates in the near future as Brexit fears take a grip, economists are predicting a hike could come as soon as November this year.

Record low mortgage rates continue to sustain market activity, many of the Bank of England’s Monetary Policy Committee are now adding to the calls for an interest rate rise, this picture could very quickly change.

A “wait and see” approach is best avoided for existing expat UK homeowners considering re-mortgaging.

The number of expat mortgages approved also went up in May and June, suggesting the market is picking up steam before the Brexit outcome is decided..

Expats who avoid reviewing their current mortgage deal could well pay for this error in the long term as interest rates look to be going upwards. Not everybody will benefit from changing their mortgage, but it certainly makes sense to check how your existing deal stands up to the future.

Contact us.

If you would like to review your current mortgage please make contact and one of our independent advisers will be happy to help.

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Sound advice and a great deal easier

SThousands of expat borrowers could be missing out on a better mortgage deal by not speaking to an independent adviser, research has found.

The survey of over 1,000 expats revealed that 31% who went direct to a lender didn’t understand how a independent mortgage adviser could help with their search.

The findings also showed that 69% of borrowers who went straight to a lender hadn’t re-mortgaged in the last five years, while 74% stayed put because they felt they had a ‘good deal’.

Without seeking independent mortgage advice, individuals would have missed out on the extra mortgage deals that are only available through a mortgage adviser.

The analysis showed that the mortgage industry still needs to demonstrate the value of independent mortgage advice to expat borrowers – just 30% of those who went direct to the lender said that they would likely speak to a mortgage adviser next time.

Meanwhile, 60% who didn’t seek advice when they took out their last mortgage didn’t know mortgage advisers were there to help the borrower, and just over a third (34%) thought a independent mortgage adviser was there to support the lender.

What’s more, borrowers going through a mortgage adviser have access to far more mortgages than those going direct to the lender.

Expats who benefitted from a mortgage adviser searching the market for the best mortgage deal were more likely to have switched in the last five years (29%), compared to just one in five (19%) of those who went direct.

Expats who used a mortgage adviser were also in favour of doing so again. Nearly all (98%) said that they found the support of a mortgage adviser ‘valuable’ and a further 95% said they would recommend using an independent mortgage adviser to family or friends.

Can we help?

If you are looking for a new or re-mortgage please do make contact and one of our fully independent advisers will be happy to assist.

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Expats using a broker could save money

EA recent survey has claimed that thousands of expat borrowers could be missing out on a better deal by not speaking to an independent mortgage adviser when looking for a mortgage.

Its survey of over 1,000 expats found that 31% of consumers who went direct to a lender didn’t understand how a mortgage adviser could help with their search.

The findings also showed that 69% of borrowers who went straight to a lender hadn’t re-mortgaged in the last five years and 74% stayed put because they felt they had ‘a good deal’. However, without seeking independent mortgage advice, these individuals would have missed out on mortgages deals that are only available through an independent mortgage adviser.

There are plans to use the research to tackle the misperceptions about independent mortgage advisers and raise awareness about how they can help borrowers to find the right mortgage for their needs.

Borrowers going through an independent mortgage adviser have access to many more mortgages than those going direct to the lender, including specialist mortgages for the self-employed and later life lending solutions such as lifetime mortgages..

Homeowners who benefitted from a mortgage adviser searching the market for the best mortgage deal were more likely to have switched in the last five years (29%), compared to just 19% of those who went direct. 

Borrowers who used a mortgage adviser were also overwhelmingly in favour of doing so again. 98% said that they found the support of a mortgage adviser ‘valuable’ and a further 95% said they would recommend using a mortgage adviser to family or friends.

Help required?

If you would like to review your current expat mortgage please do make contact and one of our expert independent advisers will be happy to guide you.

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Obtaining an expat mortgage

OIf we put Brexit to one side for the moment, there are many expats originally from the UK looking to acquire property in their former homeland. The value of sterling has fallen since the 2016 referendum on the EU and even though it has made a short-term recovery, the real spending power of the euro and dollar has increased significantly. However, how hard is it to obtain an expat mortgage?

Criteria

There are a number of items to take into consideration when looking at expat mortgages. These include

• Proof of income
• Using assets as security 
• Credit history
• Identification and address

Proof of income

If you are employed by an international company, with a footprint in the UK, this is probably the Holy Grail for lenders and borrowers. You will likely be paid in sterling, have a good track record and be able to prove your income. The situation can be different if you have your own company, you are self-employed, or you are paid in a foreign currency.

Credit history

In many ways creating your own credit history in the UK is something you can begin well before you make an expat mortgage application. For many expats, in the far-flung countries of the world, there may not be a credit history system and even if there is, it may not be as accurate as its UK counterpart

Expat market is expanding daily

Immigration was a major issue during the EU referendum and while much focus was placed upon European citizens working in the UK, there are many UK expats living the length and breadth of the globe.

 Can we help?

As expat mortgage specialists we offer a much-valued service to our client so please make contact if we can assist you.

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Expat mortgages

Most expats have a strong desire to buy or retain ownership of residential property in the UK due to ever-increasing property prices and long-term security.  Even with the Brexit situation property in the UK has remained strong with values seemingly rising all the time albeit at a lesser rate.

Certain parts of the country are stagnating in terms of increasing but overall the UK market is as vibrant as ever.

There is still a lack of housing which makes the buy-to-let market very attractive to expats who want a foothold in the UK and achieve a return on their capital. If you look at the basic interest rates on offer at the major banks it’s little wonder why expats don’t see savings as a way forward.

Whatever reasons you may have for considering purchasing a house or flat in the UK, the good news is that there are lenders who are more than willing to offer expats mortgages. Many providers don’t even advertise the fact. 

The expat mortgage market is very complex, you would be wise to seek professional independent broker advice as to what product best meets your needs. Independent brokers will have access to a number of companies offering very favourable rates which are tailored to suit most needs, including buy to let.

Re-mortgaging to get the best rates of interest and save money

When taking out a new mortgage it is normal to get an introductory rate, for example it may be a low fixed or discounted rate or a low tracker rate for the first few years.

Introductory deals normally last for between 2 to 5 years but some are only months. Once the deal comes to an end it is likely the mortgage reverts to the standard variable rate which can then start to cost you extra money.

Can we assist you?

If you are looking for a new or re-mortgage do get in contact and one of our qualified advisers will be happy to help.