> Foreigners are able to buy property in the UK.
> Most nationalities are eligible for investment loans, but not with all banks.
> Lenders will require proof of income and possibly to pay up to 40% deposit.
> Foreigners can often secure loans in their own country, with different tax implications.
> Expats will need to secure the services of a solicitor/conveyance solicitor in UK.
> Expats will be asked to pay 10 percent of the purchase price at exchange of contracts.
An Agreement in Principle (AIP) is a document that a lender will provide you after taking some basic information, performing a credit search and coming up with a figure that ‘in principle’ it would be able to lend.
Something to know
The easy credit boom of the 2000s played a big part in the recent UK financial crisis.
From 2012 lenders have to carry out stricter checks on borrowers: expect to be quizzed on habitual spending like your rent, energy bills, mobile phone or gym contract.
How to start:
1. Carry out a first online credit search by yourself. For example here.
2. Decide how big is your deposit. Consider that buying a property includes also minimum the following costs: legal and survey fees (valuation fees, surveyor's fee, electronic transfer fee), mortgage costs, stamp duty, moving costs, possible refurbishment, small repairments, insurances, etc.
3. Speak with the mortgage adviser of your bank (or any bank) or a qualified mortgage broker.
Mortgage advisers in banks and building societies will only tell you about their own products, brokers compare mortgage rates from a large number of banks and lenders.
Your bank already knows the balance of your checking and savings accounts, if you have long records qualifying can be easier and faster.
4. Decide roughly how your deposit can be estimated as a percentage of the property's value.
> Now it's possible to get a home loan with a 15%, 10% or even 5% deposit (bear in mind that the
jump in rates is substantial, so raising that extra cash can really pay off).
> The benchmark figure is 25%.
> For the absolute cheapest deal you're likely to need 40%.
5. Receive and save your AIP in your records.
What did I do?
I choose a mortgage broker that has been highly recommended by two good friends and colleagues.
She helped us before to get an AIP quickly and then to choose a mortgage.
She made us look beyond the interest rate and properly compare the overall cost of the mortgage.
She recommend only a mortgages that she knew were suitable for us so we didn't waist time on a lot of applications.
Suggestion: Check your broker’s credentials
All mortgage brokers should be listed on the Financial Conduct Authority Register.
Remember: an Agreement In Principle (AIP) doesn’t guarantee that the lender will lend.
Once a full mortgage application is made the lender may start looking all the documents in more detail. This could ultimately lead to a different figure or decision.