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Old 25.09.2020, 20:28
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UK mortgage companies

Hello,
I live and work in CH with a B-permit and would like to buy a house in the UK. my budget is up to £300k max. can anyone recommend any UK lenders that offer good rates to British expats? is it worth checking with Swiss based lenders?
Any feedback or advice would be greatly appreciated !
Thank you !
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  #2  
Old 26.09.2020, 04:08
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Re: UK mortgage companies

There are very few UK lenders who will deal with ex pats for Buy to Let mortgages. Right now, there are even fewer.

You need to go to an independent mortgage broker, who can search the "live" market for you. We use one called Property Master, which scours the whole market and does most things completely online

Once you apply, be prepared to jump through immeasurable hoops of paperwork, plus accept a deal for lower LTV at 3% or 4% higher interest rate than non ex pats.

We are currently on month 11 of the application process for one of our properties, because the lender keeps coming up with new document requirements or asking for updated versions of what we have already supplied (eg. Last 3 months payslips) because the previous ones have "expired".

Regards



Ian
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Old 26.09.2020, 13:26
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Re: UK mortgage companies

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There are very few UK lenders who will deal with ex pats for Buy to Let mortgages. Right now, there are even fewer.

You need to go to an independent mortgage broker, who can search the "live" market for you. We use one called Property Master, which scours the whole market and does most things completely online

Once you apply, be prepared to jump through immeasurable hoops of paperwork, plus accept a deal for lower LTV at 3% or 4% higher interest rate than non ex pats.

We are currently on month 11 of the application process for one of our properties, because the lender keeps coming up with new document requirements or asking for updated versions of what we have already supplied (eg. Last 3 months payslips) because the previous ones have "expired".

Regards



Ian
Thank you for your feedback. I am actually trying to buy a house to stay whenever we are in the UK which is quite often and eventually live in in the future. no plans to let it out. I found few banks and building societies that I am going to contact to get more info next week. I will update here if I am successful.
Have a great weekend !
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Old 26.09.2020, 13:50
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Re: UK mortgage companies

As has been mentioned, you're probably better off going to a broker. They can often use their own judgement and pull strings whereas if you go directly to highstreet banks the computer will likely say no.
And, as with a lot of things, money talks. If you have a high Swiss salary and substantial savings that will help.
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Old 27.09.2020, 05:48
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Re: UK mortgage companies

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Thank you for your feedback. I am actually trying to buy a house to stay whenever we are in the UK which is quite often and eventually live in in the future. no plans to let it out. I found few banks and building societies that I am going to contact to get more info next week. I will update here if I am successful.
Have a great weekend !
Sadly, that makes it worse. If you are not going to BTL the property, or live in at the moment, I believe you will struggle to find a willing lender at all, right now.

UK mortgage lenders are minimising risk as much as they can. They don't like ex pats because of the uncertainty of confirming your foreign salary; worries that currency fluctuations will affect your ability to pay; and the difficulties of chasing you in a foreign country for the money if you don't pay. The fact you are not even going to live in the property once you've bought it is actually another big red flag, unfortunately. They no longer consider their having security over the property is enough, as the actuaries are predicting doom and gloom for house prices once the recession bites.

What you will find is plenty of banks who will talk up their ex pat lending willingness, only to say no for some spurious reason when you actually apply. And they will take ages doing it, which can easily cause your purchase to fall through.

That's why you need a broker to help fast track you to ones who are still vaguely interested in actually doing business. Otherwise you will waste so much time chasing promises.

I'm not saying it is impossible, but even in good times expat borrowing was never easy. And we are not in good times.

Good luck!

Kind regards



Ian
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Old 27.09.2020, 09:01
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Re: UK mortgage companies

I can agree with what has been said above. I've had IT contractor mortgages against our UK house without any pain whatsoever for a decade and when our renewal came up in Jan and I mentioned I'd be working in Switzerland instead they all suggested we roll over our existing deal with Natwest rather than going out to market, as lenders are extremely averse to lending to people getting paid in another currency.

We have 50% equity free in the house (worth 650-700k) as well so it's not like it was remotely a risk from their perspective at all really and ironically the rate here is much higher than in the UK as well.
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Old 27.09.2020, 09:07
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Re: UK mortgage companies

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We have 50% equity free in the house (worth 650-700k) as well so it's not like it was remotely a risk from their perspective at all really and ironically the rate here is much higher than in the UK as well.
Rates were far higher in London in 2002 when the exchange rate was 2.6 CHF to £1.
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Old 27.09.2020, 13:12
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Re: UK mortgage companies

Where are you looking to buy, in some parts of the country you could buy a house outright with that money, or even two houses.
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Old 27.09.2020, 13:31
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Re: UK mortgage companies

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Where are you looking to buy, in some parts of the country you could buy a house outright with that money, or even two houses.
I am looking in the south of England. so will definitely need a mortgage :-)
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Old 27.09.2020, 13:34
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Re: UK mortgage companies

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As has been mentioned, you're probably better off going to a broker. They can often use their own judgement and pull strings whereas if you go directly to highstreet banks the computer will likely say no.
And, as with a lot of things, money talks. If you have a high Swiss salary and substantial savings that will help.
Thank you for the advice. I'll go with the brokers to see if I can get a good deal. I do have the option to buy in france instead but I am not sure how things will be post Brexit.
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Old 27.09.2020, 14:10
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Re: UK mortgage companies

Worth checking if a house is unoccupied for 30 - 45 days that it does not invalidate the terms of property insurance, or the mortgage.

Also, if you have a house in the UK that you regularly return to, and is not let to tenants, this is a clear signal of UK (tax) residence.
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Old 27.09.2020, 22:05
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Re: UK mortgage companies

If you decide to let it Try hsbc expat. Beats anything else I saw.

You can get a tracker at 2.49%

If you don't you are probably liable for uk taxes as mentioned above.
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Old 28.09.2020, 09:55
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Re: UK mortgage companies

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Also, if you have a house in the UK that you regularly return to, and is not let to tenants, this is a clear signal of UK (tax) residence.
No, having a home available is just 1 connection to the UK, it's identical to spending 14 nights at a relatives house or 14 nights in the same hotel.

This is irrelevant to someone who has a full-time contract of employment in CH & spends less than 91 days in the UK working 31 of those days or less. (3rd Automatic overseas test)

You can read all the rules here https://www.gov.uk/government/public...-test-srt-rdr3
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Old 28.09.2020, 11:29
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Re: UK mortgage companies

If you've maintained a bank account in the UK, you should be able to get a mortgage from them without too many problems, as long as you meet their criteria that is. HSBC is very good in this respect as mentioned above.
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Old 28.09.2020, 15:05
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Re: UK mortgage companies

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Also, if you have a house in the UK that you regularly return to, and is not let to tenants, this is a clear signal of UK (tax) residence.

I have a home in the UK and I can be there up to 183 days before I would become tax resident.


Tax rules changed many years ago to make for clearer rules than they used to be.
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Old 28.09.2020, 15:27
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Re: UK mortgage companies

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I have a home in the UK and I can be there up to 183 days before I would become tax resident.
That is not true, if you are in the UK more than 91 days then you can not rely on the 3rd automatic non residence test for people who work abroad.

You clearly have accommodation (tie)
More than 90 days in either of previous 2 years (tie)
You worked more than 45 days in the uk 3hours or more (tie)
Children or Spouse in the UK (tie)

With 2 ties over 120 days makes you UK tax resident
With 3 ties over 91 days makes you UK tax resident
With 4 ties over 46 days makes you UK tax resident

You could only do 182 days in the UK if you had not lived in the UK for the 3 previous years, not been in the UK for 91 days in either of the last 2 tax years, work in the uk for less than 45 days & have no children or spouse in the UK.

https://www.gov.uk/government/public...-test-srt-rdr3
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Old 28.09.2020, 16:22
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Re: UK mortgage companies

If you live and are registered in Switzerland, you are tax resident in Switzerland. If you are employed and paid in Switzerland (salaried) I doubt HMRC would tax you on the days you were in the UK over 90. If they did, the double tax treaty would kick in and you could deduct Swiss taxes paid.

I believe the 90 day rule is really aimed at people who claim to live overseas while running businesses in the UK and managing those businesses while in the UK.
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Old 28.09.2020, 16:33
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Re: UK mortgage companies

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If you live and are registered in Switzerland, you are tax resident in Switzerland. If you are employed and paid in Switzerland (salaried) I doubt HMRC would tax you on the days you were in the UK over 90. If they did, the double tax treaty would kick in and you could deduct Swiss taxes paid.

I believe the 90 day rule is really aimed at people who claim to live overseas while running businesses in the UK and managing those businesses while in the UK.
Plenty of Swiss residents are also UK tax resident, UK taxes on Worldwide income & Capital gains, not gust the extra days. To avoid UK CGT you need to be away for 5 full tax years, so yes HMRC are very interested to people who overstay a couple of days here & there. Remember IHT is usually payable to people who were UK domiciled at birth., wealthier people are on their radar.

UK tax is based on self declaration, if caught penalties + interest is insane.

Since HMRC will be able to see arrivals from Schengen they will have a pretty good idea, their computers are joining dots & crossing T's.
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Old 28.09.2020, 17:10
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Re: UK mortgage companies

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Plenty of Swiss residents are also UK tax resident, UK taxes on Worldwide income & Capital gains, not gust the extra days. To avoid UK CGT you need to be away for 5 full tax years, so yes HMRC are very interested to people who overstay a couple of days here & there. Remember IHT is usually payable to people who were UK domiciled at birth., wealthier people are on their radar.
Interesting points, but I'm not sure how HMRC tax you on the days you are in the UK, above 90 if you're salaried and pay taxes in Switzerland? I'm no expert in this field and fortunately not have to worry about it!

I did come across this as i looked out of curiousity, but to be honest it's all Chinese to me!!

https://www.gov.uk/tax-foreign-income/residence

https://www.gov.uk/government/public...-test-srt-rdr3
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Old 28.09.2020, 17:25
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Re: UK mortgage companies

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Interesting points, but I'm not sure how HMRC tax you on the days you are in the UK, above 90 if you're salaried and pay taxes in Switzerland? I'm no expert in this field and fortunately not have to worry about it!

I did come across this as i looked out of curiousity, but to be honest it's all Chinese to me!!

https://www.gov.uk/tax-foreign-income/residence

https://www.gov.uk/government/public...-test-srt-rdr3
The UK is entitled to full taxation on your worldwide income & gains. Your salary figure will be higher as AHV/ Accident Insurance etc & plenty of other Swiss deductions are not allowable. Then you get a full credit for any Swiss tax paid, so expect a sizeable bill ! Anyone who thought it was clever to stay in the UK & work from there for a few months over lockdown could be in for a big surprise.
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