Extract from Article in The Telegraph
Lenders in the UK use the services of companies such as Experian or Equifax to check out how risky it is likely to be to lend to an individual, and if you have not had any financial services in the UK for some time, then you will not have a presence at these credit reference agencies. Details of any bank accounts, credit cards or loans you have in the UK will be held with these agencies, and lenders will be able to see how you have serviced these accounts over the years.
This will build up your "credit rating" – which can be adversely affected if you make a lot of applications for loans in a short time, or if you drop off the financial radar.
One easy way for expats to get around this problem is to maintain a financial presence in the UK, said James Cotton of specialist mortgage broker London & Country Mortgages.
He added: "This will keep your credit record ticking over as it does not leave a big gap in your credit history within the UK. The lenders can see that you have had a mortgage or an account, and if you have had money regularly moving in and out it will make them more willing to lend to you."
While Mr Cotton said that much of the credit tightening is happening in the sub-prime area – where lenders offer money to those with a less than perfect credit history – there has also been some reduction in the choice of mainstream mortgages.
However, he added: "It still leaves over 2,000 mortgages, there are still hundreds of deals available. If you have a decent deposit, then whether you are an expat or not you should find it a lot easier to secure a loan."
Many expats will be looking to remortgage their property in the UK in the coming months, and again having an existing mortgage should make this easier, said Mr Cotton.
The type of mortgage you need will depend on whether you are letting it out or have family living in the property.
If it is rented, then you need a buy-to-let mortgage, unless you have permission from your lender to rent the property. Most lenders are happy to do this but will usually increase the interest rate slightly as a result.
If you are looking to remortgage or buy in the UK, Mr Cotton recommends a two-year fixed rate from Britannia at 5.49 per cent, which has an arrangement fee of £999. Cheshire Building Society also has a two-year fix, at 5.39 per cent, with an arrangement fee of £1,499.
If you would like to fix for longer then you can find some cheaper deals.
Mr Cotton recommended Britannia's 5.39 per cent fixed for five years, which also has a £999 arrangement fee. This has a lower rate than the two-year fix thanks to better "swap rates" – the rates at which banks can borrow from each other – in the credit markets, said Mr Cotton.
Maintain a UK Credit Rating
Interesting article. Unfortunately, I have to say that I have not found this to be the case - this is just one personal experience.
I've had a mortgage with Abbey for 18 years. I've never missed a payment. I've been living here for almost 10 years and let the property out. Abbey are aware of this. Whilst I was working, I was lucky enough to be able to pay off a substantial part of the capital borrowing. My property is now worth significantly more than the debt. I would have thought that I'd be a very small risk.
So, last year the freeholders, the council, carried out major works to all the properties on their side of the street, including mine. The terms of the lease allow them to ask for payment in advance, based on estimated cost. As a payment option they were offering all leaseholders the option to pay monthly, interest free over three years.
I thought about this and decided that it would be better to borrow the money off Abbey on a repayment basis and add it onto the mortgage over the next 7 years. I'm married now and am never cash rich, so although I'll end up paying more, it made sense to do it this way and maximise my monthly income over here.
So, when back in the UK last year, I went into the local branch and applied for 1,200 pounds. That's right - just 1,200. Not a lot of money bearing in mind the value of the property. The branch manager sent the application off to the loans department saying it wouldn't be a problem at all.
Wrong. Eventually, I had a letter from them turning the application down. The reasons:
1. Because I lived abroad.
2. The amount of the loan application was TOO SMALL!!!!!
Can you believed it? I couldn't. I've written again to the loans department pointing out that I'm no credit risk and that, given the slagging off financial institutions have been getting in the UK recently for lending TOO MUCH money to people (based on their incomes), I was sure that newspapers and their competitors would love to hear about this.
I'm still waiting for a reply. This has been going on for over a year now
I reiterate that this is just my own personal experience and it made my "laugh" when I read the above article.
I've had a mortgage with Abbey for 18 years. I've never missed a payment. I've been living here for almost 10 years and let the property out. Abbey are aware of this. Whilst I was working, I was lucky enough to be able to pay off a substantial part of the capital borrowing. My property is now worth significantly more than the debt. I would have thought that I'd be a very small risk.
So, last year the freeholders, the council, carried out major works to all the properties on their side of the street, including mine. The terms of the lease allow them to ask for payment in advance, based on estimated cost. As a payment option they were offering all leaseholders the option to pay monthly, interest free over three years.
I thought about this and decided that it would be better to borrow the money off Abbey on a repayment basis and add it onto the mortgage over the next 7 years. I'm married now and am never cash rich, so although I'll end up paying more, it made sense to do it this way and maximise my monthly income over here.
So, when back in the UK last year, I went into the local branch and applied for 1,200 pounds. That's right - just 1,200. Not a lot of money bearing in mind the value of the property. The branch manager sent the application off to the loans department saying it wouldn't be a problem at all.
Wrong. Eventually, I had a letter from them turning the application down. The reasons:
1. Because I lived abroad.
2. The amount of the loan application was TOO SMALL!!!!!
Can you believed it? I couldn't. I've written again to the loans department pointing out that I'm no credit risk and that, given the slagging off financial institutions have been getting in the UK recently for lending TOO MUCH money to people (based on their incomes), I was sure that newspapers and their competitors would love to hear about this.
I'm still waiting for a reply. This has been going on for over a year now
I reiterate that this is just my own personal experience and it made my "laugh" when I read the above article.
Lomu this will make you larf as you know us barclays connect card holders for 18 months were messed around having our cards rejected at ATMs and then having to ring (at our expence for the most part) to get our cards switched back on (there is a thread on this)
I took advice and while in the UK changed to Nationwide to do this i changed my address of 9 years here to my sisters place
I still had an overdraft of 300 quid so i sent a letter to barclays asking them to change my address back to Thailand and enclosed a cheque for 50 quid and said i would do this until it was paid off
My sister then read a letter she recieved sent to me stating Quote they could not verify my signature and therefore could not change the address unless i was physically present in the UK, they did however cash the cheque that signature obviously passing muster
I wrote to them stating that this letter obviously cannot be verified by my signature and i shall not be forwarding any more funds to pay of my overdraft until my address is changed to here, to date no reply
I have resisted the urge to send a further missive stating as you cannot verify my signature or address piss off
I took advice and while in the UK changed to Nationwide to do this i changed my address of 9 years here to my sisters place
I still had an overdraft of 300 quid so i sent a letter to barclays asking them to change my address back to Thailand and enclosed a cheque for 50 quid and said i would do this until it was paid off
My sister then read a letter she recieved sent to me stating Quote they could not verify my signature and therefore could not change the address unless i was physically present in the UK, they did however cash the cheque that signature obviously passing muster
I wrote to them stating that this letter obviously cannot be verified by my signature and i shall not be forwarding any more funds to pay of my overdraft until my address is changed to here, to date no reply
I have resisted the urge to send a further missive stating as you cannot verify my signature or address piss off
A Greatfull Guest of Thailand
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Don East Stand
- Professional
- Posts: 290
- Joined: Mon Sep 24, 2007 10:01 pm
Hi Lomu
Interesting indeed that you were turned down because the amount of the loan application was too SMALL
Are you able to request a BIGGER loan amount, and then use it to reduce the amount back to the 1200 you initially wanted?
If not, can you perhaps remortgage to get what you want? I love taking on these big institutions and beating them
Good luck go get them
Interesting indeed that you were turned down because the amount of the loan application was too SMALL
Are you able to request a BIGGER loan amount, and then use it to reduce the amount back to the 1200 you initially wanted?
If not, can you perhaps remortgage to get what you want? I love taking on these big institutions and beating them
Good luck go get them