Hello, my husband and I are currently living in Beijing, China - he works for the FCO, and therefore has diplomatic status, as do I.
We're in the process of buying a house - what are the mortgage implications of our FCO posting?
We return to the UK in six months. Thank you
Isabelle, Beijing, China
Ask the Specialist response:
Thanks for your enquiry Isabelle.
That is an interesting one. Technically as your husband works for the FCO as a diplomat then he in effect works in the UK at the Embassy in Beijing and is paid in Sterling. Therefore, technically, most lenders should be able to consider a mortgage in his situation as if he were in the UK up to the full 95% loan to value currently available in the market place (assuming the mortgage is for residential use).
Having said that, most lenders would be very cautious regarding residency overseas and would therefore rule a mortgage out for you and your husband on that basis alone. Additionally, some lenders such as Nationwide would want you to be back in the UK for at least 3 years before they would consider a mortgage for you both.
Clients in similar situations have also reported to us that they have struggled to get a mortgage as the majority of lenders use automated computer systems to assess and credit score an application. This, we are told, of results in the lender being unable to find a good enough UK credit record on which they base their lending assessment.
The other issue we would have to cover off is of course your planned return to the UK and any changes in income associated with this move. A lender would have to be comfortable with your current income situation and any changes for the next five years.
Having said that, it is something we would likely be able to assist with as we have certainly helped diplomats employed by the FCO in the past.
We would have to place you with a lender that would take an holistic view to your situation, wouldn't rely on credit scoring and would be comfortable with the planned return to the UK in 6 months.
There are a number of options for the mortgage based on how you wish to use the property. Firstly - if it is to be your main residence we could look to arrange a residential mortgage up to 95% loan to value. Secondly if you wish to purchase now and rent the property before returning to the UK then we could look at that scenario up to 85% loan to value. Finally, if you wish to purchase a buy to let property then we could also look at that option up to 75% loan to value.
To obtain an indication on mortgage rate you can either check our offshore worker mortgage rates or alternatively I'd recommend speaking to one of our Advisers on +44 203 216 2037 or send us an enquiry online.
David Rostron MEng(Hons) CeMAP CeRER
Business Manager
