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Expat Buy to Let – Case Study

The Client
The Client is an Expat and Teacher who has been working in Thailand for more than 6 years for a company based in the UK. Their husband works for a major holiday booking company and has been working with them for more than 5 years.

After an initial conversation, looking at their criteria and based on their country of residence, it was going to be challenging since some lenders have a restrictive list of countries that they lend to.

The Scenario
The clients had been saving from their income and had saved a healthy deposit and had found a property that was best suited for the rental returns they were looking to achieve. The clients were putting down 30% deposit and needed a Specialist Mortgage Adviser who was experienced in dealing with Expat Mortgages.

Discover our Expat Mortgage Broker services

The Solution
Initially we considered looking at a certain High Street Lender who lend to Expats through their international business arm, however, due to their restrictive list, we had to look at our wider whole of market specialist Lenders. Not only was the selected Lender able to provide the client with an Expat mortgage, but the whole process was also quick and seamless, and we were able to lock in the product for the client the same day. In this current volatile market, this is essential as the interest rates for lenders have been changing frequently. Any delays in the process could mean that the clients could end up with worse deal, since the interest rates are mostly on an upward trajectory at the moment.

Summary
A lot of international Lenders are keen to lend to Expat clients, however, many restrict their market depending on the countries they support. The speed and expertise of service in this market that we can provide could mean that we are able to source the best products for our client before there is any active movement in the market.

If you have any questions about Foreign National or Expat Residential or Buy to Let Mortgages and would like to receive a free quotation or advice, please call +44 1494 622 555.  today. You can also fill in this short online form to get started. A member of our Specialist Expat Mortgage Team will get back to you straight away.

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Expat Residential Mortgage – Case Study

The Client:

Our client is an Expat working as a Sales Director and living in Hong Kong until recently when he moved to Japan. The client works for a UK based multi-national company and earns good income with most of his overseas expenses also being paid by the company.

The Scenario:

The Client was seeking an Expat Residential Mortgage to enable him to purchase a property for him and his family to live in upon their upcoming return to the UK. The client had a handsome 40% deposit.

Contact us today to discuss Expat Mortgages and how we can assist you.

The Solution:

Being a whole-of-market Broker, we could easily offer standard Expat mortgage rates and terms to this client as we have access to all of the Expat Mortgage Lenders, including the specialist lenders.

However, through our specialist Expat knowledge and experience along with the clients’ strong credit profile and large deposit, we were actually able to offer

him standard UK Resident (non expat) mortgage rates, even though they were still living in Japan. This was an excellent outcome for the client as the rate secured was an overall 1.1% cheaper than the cheapest Expat market rate that the client was eligible for.

Summary:

When looking for a “Buy to Live” property it is important to remember that a family member will have to occupy the property when the mortgage holder is abroad, as the property cannot be left vacant since this would invalidate the buildings insurance.

Key things to consider for Expat Mortgages:

  • Certain currencies will not be accepted by Lenders- usually if the currencies is considered volatile.
  • Expat Mortgage Interest Rates are usually higher than standard (UK Resident) mortgage rates.
  • Lenders’ Arrangement Fees are usually a percentage of the loan rather than a  flat / fixed fee.
  • The client/s will need an active bank account and credit footprint in the UK.
  • Loan to Values are typically lower.

To know more and speak to one of our Expat Mortgage Experts, call us now on +44 1494 622 555. You can also fill in this short online form to get started. Our team of Expat Mortgage Experts will get back to you straight away.

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Expat Remortgage Interest Only Adverse Credit – Case Study

The Client:

Our client lives in Canada and has a residential property in the UK that she has been letting out since she left the country in 2016. As a UK-born resident, the client moved to Singapore initially and then on to Canada to live. The property is currently on shared ownership with the client wishing to purchase the property up to 75% and remove the shared ownership aspect entirely.

The client has good income and an established job, however she does have some adverse credit including missed mortgage payments. One missed mortgage payment was just over a year ago, and the other two within the last three years.

Contact us today to discuss Expat Mortgages and how we can assist you.

The Scenario:

Initially the client wanted an Expat capital and interest mortgage, however once we established the clients’ full circumstances there were multiple factors to consider. Points for considerations included, the fact there is the adverse credit, no other property is owned and the client used to live in the subject property. We also had to be mindful of the fact that the majority of lenders that would be considered more ‘specialist’ in the Expat sphere do not offer capital and interest. There are also some lenders that simply do not allow a remortgage away from shared ownership.

The Solution:

A five year fixed mortgage was always going to be the only option in regard to rental affordability. However, once we’d checked the case with the mainstream Lenders due to the issues identified above when all put together, the case unfortunately didn’t fit with any of them.

However, we found a Specialist Lender that was comfortable with what was regarded as “consumer lending” by many, and they had criteria on missed mortgage payments, but only within the last year. Additionally, the Specialist Expat Lender was fine with the shared ownership aspect, and they also offered capital and interest mortgages.

With the benefit of our specialist advice the client was able to make an informed decision. The client was keen on capital and interest as previously mentioned. However, it left the client very close to coverage required due to the rental amount received – also, as they were paying management fees it didn’t fit with the Lender overall on this basis. We therefore suggested the client opt for an Expat Interest only mortgage – reason being that while the Lender put forward doesn’t allow intermittent overpayments, they do allow the client to pay it all off within the 5 year fixed without any Early Redemption Charges (ERCs).

In this scenario, as long as the client keeps their credit clean, in a couple of years, they will probably be able to remortgage to a better lender, change it to Capital and Interest mortgage and actually pay less and there won’t be any exorbitant early redemption charges. The client was delighted by this solution as it ultimately ticked all her boxes.

Key Factors to consider for Expat Mortgages UK:

  • Not all Expat Lenders offer capital and interest.
  • Adverse credit makes Expat Mortgage Lending Specialist and also limited.
  • A lot of these Expat Lenders consider if you’ve ever lived in the UK and have any other properties in the UK.
  • Remortgaging away from shared ownership isn’t widely available.

To know more and speak to one of our Expat Mortgage Experts, call us now on +44 1494 622 555. You can also fill in this short online form to get started. Our team of Expat Mortgage Experts will get back to you straight away.

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Expat Case Study – Expat Buy to Let Purchase

The Client:

The client is an Expat looking to purchase a flat on a Buy to Let basis in London. The client came to us having previously instructed another Mortgage Broker for the same application, as the other broker was moving at a too slow a pace. This caused the vendor to become anxious and potentially could’ve resulted in the deal being lost due to pace at which the London market was moving.

The Scenario:

We were able to provide the client with quotes for some excellent rates within the same day and we were ready to submit a full mortgage application in 24 hours. The client was putting in deposit, some from savings and the remainder from a remortgage on their existing flat that they own in London.

Contact us today to discuss Expat Mortgages and how we can assist you.

The Solution:

We were able to submit the applications for both the properties within 24 hours and were able to achieve a mortgage offer on the Expat Buy to Let mortgage within 3 weeks of the application being submitted. This was an excellent outcome as Expat mortgages typically tend to take a bit longer due to difficult Underwriting process, time differences and the logistical challenges in different countries.

The Expat client was extremely happy with the outcome and within the timescales it took from her initial Mortgage Broker to reply, we had already achieved a mortgage offer for them.

We work with the client’s expectations all the time and can achieve excellent outcomes in record times. This is due to our excellent Customer Service and Case Management platform (WiiN) which provides real-time updates for clients 24/7/365 and their overcomes time zone issues. Additionally, the fact that our clients can speak to their Dedicated Mortgage Advisor and Dedicated Case manager from application to completion, which saves them hours speaking to different people each time who are unfamiliar of the status of the case etc. This helps take the jargon out of the applications and helps us give our clients a very personal and efficient approach.

Key Points to consider:

Things to consider when discussing finance with Expat clients:

  • Interest rates are higher for Expat Mortgages.
  • Lender’s arrangement fees are usually a percentage of the loan rather than a flat fee.
  • Loan to Values can be restricted.
  • Check to see what credit footprint they still have in the UK – will need an active UK bank account.
  • Certain countries will not be accepted by lenders, below are 2 links to the Financial Action Task Force for countries with increased monitoring or calls for action. Other lenders will use the Basel scale, link also provided below:

    Financial Action Task Force
    Basel Scale

  • Certain foreign currencies will not be accepted by Lenders, usually if the currencies is volatile.

To know more and speak to one of our Expat Mortgage Experts, call us now on +44 1494 622 555. You can also fill in this short online form to get started. Our team of Expat Mortgage Experts will get back to you straight away.

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Expat Case Study

The case study below shows a case for an expatriate client and how we were able to assist them with their finance needs.

In this particular case the client was a resident of Vietnam and had an existing portfolio of 3 properties and was looking to capital raise on an unencumbered property to fund the purchase of further investment properties, to raise the funds required the client needed to take a 5 year fixed interest rate to use the lower stress rate applied to draw the funds from the property. The application was accepted by the lender and the process ran smoothly, through underwriting and valuation.

Contact us today to discuss Expat Mortgages and how we can assist you.

Buy to Live OR Buy to Let?

These are the two types of expat mortgages that are available to clients, with Buy to Live being for clients that are working abroad but whose family live in the UK, some believe that they can buy the property for them to live in when they are in the UK and leave it empty when they are abroad but this is not the case, any mortgage company will require buildings insurance to run alongside he mortgage and this would be invalidated if the property is left unoccupied for a period of 30 days or more, they can also not let the property whilst they are abroad without the consent of the lender.

Expat Buy to Let applications work in the same way as those for UK residents in terms of the rental income and loan to values. With Expat mortgages the important factors that need to be considered for the client are;

Buy to Live (at date of writing)

  • Maximum loan to value is 80%
  • Minimum loan as standard is £100,000.
  • Lenders have restrictions on which countries they will accept applicants from, typically any country with international sanctions is prohibited.
  • When assessing affordability lenders will take a shaving off the client’s income to allow for any fluctuations in the currency exchange rate
  • Clients must hold a UK bank account for the mortgage payments
  • If documents need to be certified this can be done at a notary public in their country of residence

Buy to Let

  • Maximum loan to value is 80%
  • Minimum loan as standard is £100,000
  • Clients must hold a UK bank account
  • Some lenders require the client to have a UK credit footprint to allow for a credit scoring on their system
  • First time landlords can have their loan to value restricted, typically to 65% If you have any questioned regarding some of the more detailed criteria applied, we will be more than happy to answer any questions you may have. Please note our fee structure for Expat mortgages is higher than our standard pricing, so a great opportunity to earn higher broker fees for Licensees, but always please check with an Advisor before quoting any fees to the client.

To know more and speak to one of our Expat Mortgage Experts, call us now on +44 1494 622 555. You can also fill in this short online form to get started. Our team of Expat Mortgage Experts will get back to you straight away.

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Expat Remortgage – 2 Flat Multi-unit block Case Study

An Expat client submitted an enquiry to refinance one of their portfolios, in this case a 2 flat multi-unit block on one freehold. The client had bought the property for cash and was looking to release the equity in the property to fund further purchases.

The challenges around Expatriate mortgages usually tend to be around credit score (or lack of) and whether the clients have any open lines of credit in the UK – all lenders will require the clients to have a valid UK bank account as this will be needed for the direct debit for the monthly mortgage payment once complete.

Contact us today to discuss Expat Mortgages and how we can assist you.

Another thing to consider is that most lenders will have a minimum income requirement that will need to be satisfied and as ex-pat clients will invariably be paid in a currency other than Sterling. Most often you will find that ex-pat investor has good income but the thing to bear in mind is that lenders will shave a portion of their income off to allow for fluctuations in the exchange rate, whilst others will look back at the performance over the last 5 years and take the exchange rate at its worst to underwrite on a worst-case scenario.

Things to consider when discussing Expatriate finance with a client:

• Rates are higher than standard

• Lender’s arrangement fees are usually a percentage of the loan rather than a flat fee

• Check to see what credit they still have in the UK – will need an active bank account

• Certain countries will not be accepted by lenders, below are 2 links to the financial action task force for countries with increased monitoring or calls for action. Other lenders will use the Basel scale, the second link:

Financial Action Task Force
Basel Scale

• Certain Currencies will not be accepted by Lenders, usually if the currencies is volatile

• Loan to Values can be restricted

To know more and speak to one of our Expat Mortgage Experts, call us now on +44 1494 622 555. You can also fill in this short online form to get started. Our team of Expat Mortgage Experts will get back to you straight away.