Mortgage for an ExPat - Help

PHG

Hi,

I am Irish resident (31) but up to last year I lived and worked in London for 6 years. I took a new job out of Dublin due to promotion, pay increase etc. I am paid in EUR but will do use sterling equivalent below

I am currently saving for a mortgage in London as I want to settle back there towards the end of next year. I have no debt, current saving of about 18000 and 40,000 in a pension.

My Salary, with expenses and bonus is approx 125,000 per year and I save about 2,500 per month. I put 750 into a pension per month also. I was hoping to put a 15% deposit on a 350,000 property towards the end of next year.

I have contacted 2 brokers and both have said I need a 20 to 25% deposit. A 25% deposit would give me a rate of 1.6% on the mortgage and 20% deposit have quoted me close to 3%. I am trying to move to a London project next year which would mean that by early 2020 I would be a dual taxation resident.

I currently see 2 options available to me:
- My brother is a UK resident for the last 12 years, so maybe buy with him (but he has no savings and it would be all my money in this)
- I had an ex girlfriend of 4 years in from London up to a few months ago and we may be getting back together (50/50) and to talk to her about it if we do. We had planned to buy together next year. Her income is not great though and obviously would be dangerous if we were not fully committed. if we do get back together it is marraige, kids etc. on the cards. But very high risk. In this scenario I would be bringing 85-90% of the deposit and expenditure to the table.

The brokers said that if i went with either of the 2 options above I would be able to get a 95% mortgage in the next few months. Personally, I would not do a 95% mortgage and set on a 15% deposit.

Does anyone know of any other options I can take advantage of? I would look to lock in a rate for about 10 years as at least i could stop interest rate risk but obviously FX risk is a big issue.

On a side note, as well as my pension, i do have some large expenses. I send about 400 home to my parents a month to pay for their car (they are quite old and not in good health). My own medical expenses are the same amount per month. I am currently residing in Scandinavia on a project and the cost of living here is high! my rent is about 1200 a month.

I could tighten up and save 3000 pm if I tried but as living in a new country i have joined clubs etc. to have some sort of a social life and have dinners with managers to go to so that eats into it too.

Thanks,

PHG

MortgageMamma

If you have spoken to two brokers and each has given you the same result, its a safe bet to say that their view on your situation is correct

I don't think its wise to buy with a family member or an ex girlfriend who may becoming a permanent part of your life *yet as its probably too soon for that level of commitment and you could stand to lose quite a bit of cash if it all went wrong.

My advice is take your time, buy the property when the time is right, and your circumstances are right - doing it too soon, whilst you have such high expenses every month will only bring you problems and impede affordability

Why not wait to buy a property until you know if your old relationship is rekindled and secure and then buy something? It saves buying something now and then having to move again when your partner wants a say in where they live, or children come along.

Nothing wrong with renting a while longer until your life settles down a bit

PHG

Thanks for the reply.

We (ex) and I are meeting at the weekend and this is one of the talking points. I want us to buy together and she wants to get married and have kids asap. But none would happen until the end of next year, like you say unless it is a healthy and secure relationship. If we don't rekindle I may use the option with my brother (if he is comfortable with it). Just before the break up we had decided where to buy. With the joint income we could have got a mortgage for 400K/450K (at a stretch) in Surrey. The figures I said below are based purely on my own income as I would not want to stretch myself too much.

My thought process is that I will be 32/33 when I move back to the UK and if single or together to live within Zones 3/4 for a few years until/if I meet someone else and then buy further out at say 37/38 when kids are a few years old.

I am pressuring myself to buy, no doubt, just don't want to miss the boat and get on the property ladder. My income is likely to rise marginally over the next 3 years too and factoring that into account. Also, it is likely I would assume I would be travelling to some degree with work for the next few years (even if moving back to UK) and would need to be near an airport, preferably Heathrow.

Thanks,

PHG

ACG

You want to buy at a time when your life is complex and your options are limited and to top it off you want to fix for 10 years.

I cant help but think this is one of those times where you would be better coming back, renting for 6 months, see how things pan out. You will have more options, you will have better options, if you get back with your ex, you will have a better idea if you plan on staying together. There are far more pros of waiting just a short while than there is rushing ahead.

You do not even have a job to come back to yet which will be a problem in itself. You also do not know where the new job will be I am assuming and that may determine the areas you look to buy in.

PHG

Hi ACG,

Thank you for your reply.

You make a fair point. I know the areas I want to live (Brixton, Streatham ish areas as I have family there) so want to stay near the Northern or Victoria lines, and yes the ex thing does complicate it a lot.

To clear up the job front, I will still be working with the same company (we contract around Europe) so would move to a site there. However, will still be paid out of Ireland. The sites tend be around Cheapside or Canary Wharf for the most part.

Trying to project 18months into the future which isn't easy (a lot of water can pass under the bridge by then) but want to put in the necessary ground work now to see what I can do. I am uncertain that I am not saving enough and feel behind the general curve and want to catch up!

MortgageMamma

PHG

I agree with ACG, save as much as you can, wait until life is more stable before making long term financial commitments. Committing to anything like this whilst your life is so up in the air could be financially disastrous, and perhaps you are feeling impatient to buy because deep down you want to settle down emotionally and career wise and you are using the prospect of buying a property to fulfil your need for an emotional settled life with a clear path in front of you.

Life is long, you are not that old for a first time buyer, another few months of considering your options can't hurt. See how it plays out with the ex, take your time and don't rush into anything for the sake of wanting a settled life.

If you really want to be doing something constructive regarding buying a property, try and cut back your expenditure and save more and spend some time with your future partner planning how it can be done, what you want your home to look like/where etc and researching the market in the area you wish to live in. Get some interior design magazines/websites and go through the fun part of having to decide jointly on the decor etc. It will take up some of the time and pass the hours, and keep your expenditure low as you'd be indoors talking not out at clubs etc.

Also be wary of stretching your mortgage affordability too much, especially if you are planning children in the future. I have 4, they are expensive little critters and I had to work part time and take a drop in income until the youngest was in school, you need to factor a drop in your partners earnings in future to make sure you are still comfortable when the family arrives.

A good broker can help you with most aspects of your financial planning, but now's not the right time - the most you can expect presently is a basic affordability calculation to let you know what you could borrow and how much it could cost

Sounds like you are a man with a plan, best of luck to you and the future Mrs.

ACG

2 mortgage brokers whose job it is to "sell" mortgages are both suggesting holding fire...

To be honest with what you have said, it would make me a little more comfortable doing the case, but I still think it would be better holding fire. You never know, you might find a nice Irish lady and decide to stay over there.

PHG

Thanks for the replies.

Not many Irish ladies in Sweden , plenty in London though but I prefer London women tbh.

As stated by Mortgagemamma, some of this is wanting to be settled and maybe I am starting to feel a bit old. I have a lot of family in London, hence why I want to settle there, and I guess the reason i am trying to rush it.

I need to realise that i have plenty of time and to just keep saving by myself and drive on.

I really do appreciate the advice!

PHG

ACG

I think I was 30 when I bought my first home. I only bought it as a project to boost my deposit for my "family home". We only bought that 2 years ago, I was 33. So you have a couple of years on me yet if you are buying along term home - no mad rush.

I do see your point. I think if you know and accept you are in effect paying a premium for the fact that you want to buy now rather than wait 6-12 months you are at least buying knowing the pros and cons.

There will be options out there, but it is unlikely to be with a high street bank, so it will likely cost a little more and also be a slower process than normal as everything will be done manually by an underwriter. It is probably one for a broker.