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First-Time Buyer Case Study
In this case study, we explore the experience of an UK expat who is a first-time UK homebuyer and required a mortgage to purchase a property back in Southampton, UK.
Steve Q and his wife were both offered job opportunities working for legal firms in Dubai. Aged 25 and 26 respectively, they made the move in 2015 and settled into work and lived in Burj Dubai.
The scenario
Over the last 5 years Steve and his wife had enjoyed successful professional progression, resulting in substantial pay increases and bonuses. They managed to accumulate significant savings. They’d always intended investing in a UK property where they eventually planned to settle in the future.
As a first-time buyer, they approached various mortgage lenders to explore their options. However they quickly realised that obtaining a mortgage as an expat was not as straightforward as they’d anticipated. Through an Expats in Dubai group they were introduced to Liquid Expat Mortgages, a specialist expat mortgage broker working exclusively with expats and foreign nationals for mortgage finance in the UK.
Challenges Faced
As an expat, there were several challenges when it came to obtaining a mortgage in the UK.
- Residency Status: The first challenge was the couple’s expatriate status. Many mortgage lenders have stringent criteria regarding residency, making it difficult for expats to secure mortgage financing.
- Credit History: Another challenge is establishing a credit history in the UK. Since they moved to Dubai, their credit history primarily revolved around their UAE financial activities. This lack of UK credit history often poses a hurdle when obtaining a mortgage.
- Documentation: Expat mortgage applications often require additional documentation, such as employment contracts, proof of income, tax returns, and bank statements from both the home country and the country of residence.
- Currency Exchange: The couple’s income is in US dollars, while the property purchase will be in British pounds. The fluctuating exchange rates present a potential risk and can add complexity to the mortgage process.
Mortgage Solution
As a specialist with over 14 years’ experience in arranging mortgages broker we were able to help him navigate the complexities of the mortgage application process and find suitable lenders who offered expat mortgage products.
By working with a team of Mortgage brokers and co-ordinators who have experience and knowledge of the mortgage market and its processes , they were able to provide the following assistance to the mortgage applicants:
- Residency Verification: Help in gathering the correct and necessary documentation to prove residency status, such as his work visa, employment contract, and proof of address.
- Credit History: To establish a UK credit history, the broker recommended that they maintained or opened a UK bank account and obtained a credit card to build a credit profile. Using their existing UAE credit history, Liquid Expat Mortgages were also able to identify better terms with the UK lender.
- Financial Documentation: It’s important to have all the necessary financial documents, including any tax returns, bank statements, and employment contract, to clearly demonstrate their financial stability and ability to repay the mortgage.
- Currency Exchange Strategy: Liquid Expat Mortgages were able to assist in mitigating the currency exchange risk, by consulting with a foreign exchange specialist who provided guidance on hedging strategies so minimising potential losses due to exchange rate fluctuations.
Mortgage Approval and Terms
With the assistance of our specialised and tailored approach, Steve and his wife successfully secured a mortgage offer from a UK lender. The terms and conditions of the mortgage include:
- Loan Amount: The lender approved a mortgage loan of £323,000, which represented 75% of the property’s purchase price.
- Interest Rate: The mortgage carries a fixed interest rate of 3.75% for the first five years, providing them with stability and predictability in his mortgage payments.
- Mortgage Term: The mortgage term was set at 25 years, allowing them to spread out repayments over a manageable timeframe.
- Repayment Structure: They opted for a capital and interest repayment structure, ensuring that they gradually reduced the principal amount along with the interest payments.
UK Expat Mortgages & Remortgages
No mater where you are currently living or working around the world, Liquid Expat Mortgages can help you secure a first time buyer expat mortgage in the United Kingdom. Contact us now for a free quote. Our fully qualified and experienced mortgage advisers will advise you on the best mortgage options available for your circumstances.
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