|Expatriates - Second class citizens?
This is the general UK mortgage lenders growing approach to expats. "Over there", "Overpaid" and a great target for second (at best) class service and maximum lending profit.
As an expat knows it's a frustrating business dealing with UK financial institutions from overseas. Our immortal bard didn't have call centres in mind when he mused, "music hath charms to soothe the savage breast", Beethoven's 6th is a very popular choice but "you keep me hanging on" could be a more appropriate one.
In the event of human contact with someone with a rudimentary grasp of English it will soon be plain that you may as well be calling form Mars as Dubai, Hong Kong the USA or any other expatriate centre. The most likely end response will be an inability to help. If help is at hand then be prepared to suffer the indignities of a KGB style interrogation.
Gratitude at being offered assistance now needs to be tempered by remembering that most lenders treat expatriates differently from homegrown business. Being overseas means that they cannot credit score you, which gives a wonderful opportunity to load the lending rate.
Most lenders flimsy defence to differentiating terms between expats and UK borrowers is the inability or cost of pursuing debt overseas. This totally ignores the fact that loans are only usually offered to 75/80% and in the unlikely event of repossession the lender will probably be taking over an income producing asset - as most expatriates buy to let.
There is a politics of envy that definitely pervades some lenders - expats are earning more why shouldn't they pay more. One leading UK lender used to offer standard domestic terms to expats for many years but having acquired a subsidiary prominent in the buy to let market expats letting are now only accommodated on seriously inferior terms.
Halifax until recently offered expats any of its domestic product range they have now made themselves totally uncompetitive with a range of expatriate terms some 1% "off the pace". Cheltenham & Gloucester actually state that they view expatriate business as high risk bracketing them with what is known in the UK as the "sub prime" market. This is total nonsense.
One lender by their own admission found on a thorough survey of five years expat lending minimal arrears (Probably due to shoddy collection processes) and a
Persistency, which should be the envy of any mortgage underwriter. Unfortunately greed has got the better of most lenders when it comes to expat lending.
Another new restriction lenders including Halifax and Cheltenham & Gloucester are imposing on expats is the need for a declaration that repatriation to the UK will occur in a finite time - 3 or 4 years usually. This cannot be binding - what expatriate can accurately predict their movements in this way - and does it matter?
International Mortgage Plans (IMP) have spent 20 years ensuring that their clients are not prejudiced by their expat status and will give the same lending terms as their domestic counterparts whether letting or not.
Thankfully as one big lender gets greedy, unreasonable or both IMP have been able to convince other lenders of the "worth" of expatriate business.
This is recognised by a leading bank offering IMP clients a discount on rate and two "top twenty" UK mutual Building Societies the Lambeth and the Stroud & Swindon entering the market with offers for expat letting that rank amongst the best Buy to Let terms in the UK. Thankfully they have also shown a willingness to cut the "paper chase" which makes so many expatriate lending negotiations tedious and protracted.
Expats wishing to compare their own loan package with what is currently available should click on IMP's website at www.international-mortgage-plans.com which gives an overview of the current marketplace, lenders comparable terms and incorporate a cost and commitment free 48 acceptance in principle. Alternatively email email@example.com
Matthew Wright Dip PFS
International Mortgage Plans
International Mortgage Plans are regulated by the Financial Services Authority our registration number is 302775. We hold consumer credit licence number 504524. Buy to Let mortgages are not subject to the new regulatory regime.