Buying a Property in the UK Choose a mortgage that is right for you
Introduction An increasing number of professionals of all nationalities have been moving and working abroad in the last decade. Whether you are a young executive or a high net worth individual with a diversified portfolio of global assets, you will have specific financial requirements and objectives. Offshore financial products and services can help you achieve financial security and provide you with the quality of life you require as an expatriate or international investor. Investing in international accounts is no longer the premise of the rich and famous; all expatriates living abroad may now enjoy flexibility, among other benefits, by investing their money overseas. The offshore financial industry has become more popular as financial institutions from around the world have entered the offshore market as a result of the high demand. There are now many providers that offer a broad range of services ranging from saving schemes to pension and retirement plans and wealth management accounts to lump sum investment products. Over the years, deVere has developed strong partnerships with some of the world’s leading investment houses and insurance companies, all of which offer some of the most competitive products in the marketplace and a high level of protection for the investor. In this guide, we aim to provide you with essential information on mortgages. Whether you are buying your own home or investing in a property, most people need a mortgage to do so. There are many different types of loans available and at times it can be difficult to choose the right mortgage for your circumstances.
UK resident buying in the UK Buying a home or moving home is most often a wonderful experience and is likely to be one of the biggest investments you make. However if you are a first time buyer or moving up the property ladder, you may require additional funding and will most probably need to take out a residential mortgage. A residential mortgage is a loan against the value of your home. The mortgage is paid off by monthly instalments over many years according to the plan you choose. It is not uncommon for people who have residential mortgages to change mortgage products or providers as the housing market and personal circumstances change over time. There are a number of questions you should ask yourself prior to making a decision, including:
• Should you opt for a repayment mortgage or interest only mortgage?
• Should the mortgage be provided by a bank, specialised lender or building society?
• Should the mortgage interest be based on a variable, fixed or capped rate?
Choosing the right mortgage is essential and is not always as straightforward as it may seem. We can help you by finding the solution that seems most appropriate for your circumstances.
Buying a Pr ope rt y in t he U K Choose a mortg a g e t h at i s r ig h t f or yo u
UK expatriate buying in the UK Buying a property in the UK is an appealing option for many UK expatriates, either as a potential home or as an investment. Yet there are a number of things to consider before you start looking into a mortgage that may be right for you. Most importantly, you need to decide whether the property you are looking to buy will be a home for you and your family or an investment property to let. Residential mortgage Expatriates looking to buy a residential property are usually considered good risks by mortgage lenders. As such you should be able to get a mortgage on a UK property on fairly similar terms as a UK resident with a good credit rating. However, some conditions apply:
• You can’t usually apply for more than a 90% mortgage.
• It can be difficult to apply for a mortgage in the UK as a self-employed expatriate.
However as long as you meet the income criteria and can prove so, it should be straight-forward. Buy to let mortgage UK buy to let mortgages are required for properties that you are looking to buy as an investment. A wide range of loans are available and you should not have a problem finding a suitable expatriate mortgage policy. You may find it helpful to speak to a tax consultant to find out more about the implications of owning and running a rental business. You will want to ensure that the business is established on the right basis to optimise your tax position. You should be able to offset most of the expenses such as maintenance costs, letting agency fees, mortgage interest and insurance against the rental income received to calculate your profits before tax. Onshore vs Offshore A number of potential tax benefits are available whether you have your mortgage onshore or offshore. The best option for you depends on your current circumstances. A financial consultant can help you consider the alternatives in line with your requirements. Choose a currency It is worth considering which currency you would like to pay your mortgage in. If you get paid in UK pounds, it is more beneficial to have your expatriate mortgage in UK pounds as well. However if you get paid in another currency you might want to consider having your mortgage in that currency in order to protect your money from day-to-day changes in the currency exchange rates.
Buying a Pr ope rt y in t he U K Choose a mortg a g e t h at i s r ig h t f or yo u
Equity release mortgage Equity release is the process through which you can use the value of your home to receive a lump sum of cash or regular monthly installments. In all instances, your age will determine the percentage of the value of your home that can be released. For example an older person can release a higher percentage of the value of their home than a younger person as they are not expected to live as long. There is no maximum age limit for equity release though applications are not usually granted to individuals under the age of 60.
Receive financial advice Whether you are a UK resident or a British expatriate looking to buy a property in the UK, getting to grips with the complexities of UK mortgages requires professional advice. Help yourself by finding the right mortgage solutions for your circumstances. At the deVere Group, our consultants have been trained to provide the best mortgage advice that is right for your circumstances and requirements.
About the deVere Group The deVere Group is the world’s largest independent financial consultancy group. We work with international investors and expatriates to find financial services products that suit their medium to long term requirements for investments, savings and pensions. With in excess of US$7 billion of funds under administration and management, deVere has more than fifty thousand clients in over a hundred countries. Our independence and ability to offer financial products that are tailor-made to fit an individual’s needs are behind our success. As a result we now have offices in over forty countries. You can find us in Abu Dhabi, Brussels, Dubai, Geneva, Hong Kong, Johannesburg, London, Mexico, Moscow, Shanghai, Tokyo and Zurich, amongst others. The advice we provide is free and without obligation.
Buying a Pr ope rt y in t he U K Choose a mortg a g e t h at i s r ig h t f or yo u
www.devere-group.com invest@devere-group.com
UK mortgage advice is provided by deVere and Partners (UK) Ltd, authorised and regulated by the Financial Services Authority (469151)
Copyright deVere Group 2010 Š All rights reserved