How are overseas assets and debts evaluated for UK lending?

April 7, 2016 1:56 PM

As it says up top, I'm wondering how foreign assets and debts are viewed for mortgages in the UK. Details after the jump.

Partner and I would like to buy a home in the UK. I'm a US citizen married to an EU citizen. We have have no consumer debt, but I do have a significant student loan burden from the US ($100K+) that I'm paying down via income-based repayment. I have a small amount of investment savings in the US ($10K+ from employer-based retirement plans). How will these foreign accounts be factored in to financing applications in the UK? Is it possible to exclude my income and profile from lending applications, and only look at my partner's? Not sure if it matters, but we are new residents of the UK and don't have much credit established here, but have excellent credit scores in the US.

Paying off the student loans completely is not an option right now, unfortunately. I am a healthcare provider in the US and was doing loan forgiveness through FQHCs, but we are now living overseas and I'm no longer eligible for those programs, so am on a long-term income-based repayment plan.

posted by robertthebruce to Work & Money (4 answers total)

Best answer: Just as would happen the other way round if you were British applying for a loan in the US, you are very unlikely to get a mortgage in the UK without a three year UK credit history. Your US assets will not help as mortgage lenders will not be able to access them if you default.
posted by TheRaven at 2:17 PM on April 7, 2016

Best answer: You can apply with just your partner as the named applicant but it is very much worth talking to a mortgage broker. You may need to explore either a "sub-prime" or a self certified mortgage but you will have options. Don't be scared off by the US sub-prime mortgage story; my EU sub-prime mortgage acquired via an independent mortgage broker through an arm of GE Finance (I know! I know!) is the ECB base rate + 1% for life. We're never moving.

But you are FAR from the only applicants with foreign assets to buy in the UK; you just need to find a broker who serves this market, which would be substantially Asian in UK terminology.
posted by DarlingBri at 4:34 PM on April 7, 2016

Best answer: I'm on the other side - my exemplary UK credit history meant nothing when I moved to the US and I had to build a credit score from scratch.

Likewise, your US credit scores are useless in the UK (except Amex - they transfer scores).

On the plus side, any US debt is not going to be visible to UK credit checking agencies. I'm choosing my words carefully - I'm not suggesting that you don't disclose your US debt, just pointing out that if you don't, I don't think there isn't any way of them finding out... (I am not your financial planner / accountant / lawyer / etc...)
posted by finding.perdita at 2:51 AM on April 8, 2016

Response by poster: Thanks! We'll check with a broker, after getting three years' worth of credit!
posted by robertthebruce at 6:58 AM on April 14, 2016