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Mortgages For Expats In The UK

Properties in the UK come at a premium, which means that most people need a mortgage to acquire these properties. Fortunately, there are hundreds of reputable lenders offering affordable mortgages to British citizens. What is usually required when applying for a mortgage is a decent credit rating, proof of income and legal residency. The applicant must be a legal UK resident or citizen. This creates a problem for Brits who live and work overseas. Proving their income and credit score is difficult, so it’s not easy for them to get a mortgage. Fortunately, there are some lenders offering mortgages for expats in the UK.

Requirements

Basically, you have to be a British citizen who lives and works in a country that is approved by lenders. In addition to that, the applicant must have a minimum annual income of around £40,000. This can be from pension payments or earned income. In many cases, the minimum income requirement is higher if the income is earned in local currency. The vast majority of mortgage lenders normally approve applications for buy-to-rent properties, so the property needs to have a considerable income potential. The property must also be in great condition and must be inspected to ascertain its structural integrity as well as safety.

There is a huge demand for buy-to-rent properties in the UK from expats residing all over the world. This can be attributed to the higher-than-average growth of the UK property market. This means that investors get a higher return on their investment than they would get from other markets. In addition to earning rental income, which can help them service their mortgage, buying property in the UK will also increase the real estate portfolio of the investor. The UK housing market is growing by double digits, which means that the investment will increase at the same rate over the next couple of years.

Finding the Right Financier

There are many lenders offering expat mortgages, but they are obviously not all the same. The best financiers are those with branches in all the major markets around the world. This is important because payment will be made easier as the bank can hold local currency and convert it where necessary. This means that property owners will get a better value for money due to friendly exchange rates. The right financier should also have a lot of experience financing properties for expats. You do not want to work with a lender with little or no experience financing property purchases for expats since they do not understand the challenges and their products may not be suited for expatriates.

Refinancing Mistakes You Should Avoid

The mortgage industry is looking good. Rates are low and homeowners have a great opportunity to refinance their loans. In fact, if you own a home and you have a hefty mortgage on your home, you should consider refinancing your mortgage at this time. However, since you are doing this for the first time, you can make mistakes and they may turn out to be expensive mistakes. So before you set out to refinance your home, here are a few things you should know.

Refinancing Tips # 1- Understand just how much equity you have in your home.

finance35004As you already have a mortgage, you might have already paid off a part of the loan. This makes you an owner of a small part of the home and it is called equity or your share in the home. Before you consider a refinance, you should consider just how much equity you have in your home. If you have already paid off the principal and are on the road to owning your home, don’t be lured by refinancing. Stick to the original loan and pay it off as quickly as possible. Refinancing is good but it will increase the term of your loan and you will be stuck with more payments over more years.

Refinancing Tips # 2 – Understand the value of your home

Home rates have fallen. If your home value was $900,000 ten years ago, there is no guarantee that the value of the home is the same. Moreover, home rates have lowered by 25% since the recession and they are expected to fall even more. If you don’t own enough of your home, you are not likely to receive a good refinancing offer.

Refinancing Tips # 3 — Be prepared.

Before you even set out to refinance your loan, you have to know everything possible about the refinancing process. Read up on the current interest rates, compare deals, get in touch with people who have already refinanced their loans, go online to consumer forums, find mentors or experts who will help you with free advice, and so on. Find out as much as possible about your own loan as well. Being prepared is the best way to be ready for the refinancing process and the best way to get a good deal.

Refinancing Tips # 4 — Understand loan ratios

There is one important ratio that has to be understood regarding refinancing. The first ratio is the Loan-to-value ratio (LTV). This ratio is a percentage that compares the loan amount to your home’s current market value. For example, if your home is valued at $100,000 and you want to borrow $80,000; the appraiser will divide $80,000 by $100,000 to get a LTV of 80%. This ratio influences your mortgage rate. For example, if the LTC is high, you may have to get additional insurance to protect the lender in case you default on your loan. Your best option would be to bring down this value. You can do this by paying off a large part of your mortgage or choosing government loans.

We hope that these few tips have helped you understand how the refinance process works. Don’t stay with the same lender if you are not happy with the loan rates. Make sure you shop around to get the best deals on your home mortgage. If you do your research process properly, you can easily find an affordable loan that will be paid off quickly and efficiently.

3 Key Considerations When Choosing a Mortgage Lender in California

Selecting a good mortgage lender is a task that requires diligence and clarity of thought to avoid buying an expensive home loan that could cripple you financially. Some of the key things you need to consider when choosing a mortgage lender include:

Lender Background Checks

Although this may seem like an expensive undertaking that may require you to hire a private investigator, it is actually an easy and cheap task if you know where to look for information. A good point to begin the background search would be the National Mortgage Licensing System & Registry (NMLS) website. This site is a treasure trove of information on virtually all registered and state-regulated mortgage companies in California and across the US as well. What’s more, you would not need to pay anything to access the NMLS database. In other words, you would only require an Internet-enabled device and data from your carrier of choice to access the database. Besides the NMLS database, you can also get valuable information by visiting lender’s sites, visiting real estate forums, as well as from friends, close family members/relatives and colleagues.

Small versus Large Lender

You can get a home loan from a small or large lender. Nevertheless, determining whether to go for a small or large lender depends on factors such as a borrower’s risk profile (low, mid, or high FICO score), prior financial relationship with financier, lender’s mortgage offerings, property cost, and the competence/expertise/experience of the loan officer involved. Traditionally, large lenders have been the financiers of choice for new and repeat homebuyers. However, you should include small lenders in your list of potential financiers because the mortgage landscape has changed significantly in the last few years. More specifically, according to data from Inside Mortgage Finance, small lenders now account for 60% of the entire US mortgage origination market. In comparison, they were responsible for just 39% of the same industry metric in 2009. This is because they tend to have less stringent mortgage application criteria, little/less-taxing bureaucratic red tape, fairly relaxed underwriting standards and have benefited from rules aimed at ensuring low-income earners can buy homes instituted by the government in 2013.

Good Faith Estimate

valuation-149889_640Request the lenders in your shortlist to give you their good faith estimates. At this point, it is worth noting that a good faith estimate is a legal requirement a lender must give a borrower. This estimate should contain information on taxes, interest rates, attorney fees, closing costs, title insurance, credit check costs, and property insurance rates. In general, expect actual information contained in a good faith estimate to vary slightly from one lender to another. Compare data in all the estimates received and then select lender whom you feel suits your home-buying needs, financial situation, and long-term mortgage payments relationship.

Conclusion

Buying a home is one of the most important financial undertakings in most people’s lives. This means you have to choose lender wisely to avoid incurring unnecessary home closing costs or higher-than-average monthly payments for homeowners in same category. To choose the best mortgage lender, carry out thorough background checks, determine viability of choosing a small or large lender and compare good faith estimates from several mortgage companies in California.