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Case Profile
Our clients wanted to remortgage their London Buy to Let property for which the mortgage was coming to an end. However due to their nationality, lack of UK income and rental coverage, their current mortgage provider was unwilling to renew the current mortgage.
The clients are US citizens who lived and worked in London for 10 years. They left the UK for the USA three years ago, with no plans to return. On leaving, they let out their London home. The lender was originally happy with this, but the mortgage term was ending and the bank was not willing to renew the mortgage.
The challenges were numerous. As US nationals, living and working in there, they are paid in USD and, therefore, have no UK income (other than the rental income from their Buy to Let property). Their salaries are modest as the bulk of their income is paid as annual bonuses.
In addition, as the property is their former home, the mortgage falls under CBTL (Consumer Buy to Let) regulations, for which the lending criteria are much stricter. The house is also let at a below market rate to friends, which created a further challenge as it falls below most lenders’ rental coverage requirements.
Solution
Through our broad range of private bank contacts and utilising our considerable experience in arranging large mortgages for foreign nationals, we found a lender who would take a holistic approach to the client’s circumstances.
We took the time to understand the clients’ overall financial position and identified that they had a substantial investment portfolio, in addition to large payouts of deferred bonuses in 2017.
We sourced an international private bank and made a full and detailed credit proposal to them. The bank lends to US citizens and residents, and assesses affordability (including on BTLs) on the clients’ whole income. No assets under management were required to lend at the lowest rates; the clients could simply custody assets offshore, allowing them to continue making their own investment decisions.
The clients were pleased with this outcome and were able to successfully remortgage their London Buy to Let property on great terms.
Deal Highlights
| Loan amount: | £3,800,000 |
| Rate: | 2.8% variable (3 month LIBOR (currently 0.3%) plus a margin of 2.5%) |
| LTV: | 60% |
| APR: | Overall cost for comparison 3.0% APR representative variable |
| Term: | 3 years |
| Type: | Interest only |
| Loan purpose: | Remortgage |
| Lender’s arrangement fee: | 0.5% of the loan amount |
| Early repayment charges: | None |
Notes
This case study is for information and illustration purposes only. It is not an offer, or suggestion of an offer. Each mortgage case is assessed on an individual basis and there is no guarantee that the solution described here can be repeated in the future.
Please note that this specific deal may not be available to – or suitable for – all customers, dependent on their individual circumstances. The rate quoted may become out of date at short notice and may not be available at the point at which customers enquire about it. This document may not contain all the information needed for customers to make a decision and they should seek advice.
Overall cost for comparison 3.0%APR representative variable based on 3 years at 2.8%. Lender’s arrangement fees of 0.5% of the loan amount. The actual rate available will depend on your circumstances. Ask for a personalised illustration.
largemortgageloans.com is a trading name of largemortgageloans.com Ltd. A fee of up to 1.17% of the mortgage amount is payable, of this 25% is payable on application and the remainder on completion, e.g. on a mortgage of £1,000,000 the fee would be £11,700 of which £2,925 would be payable on application. The precise amount will depend on your circumstances.
Your home or property may be repossessed if you do not keep up the repayments on your mortgage. Changes in the exchange rate may increase the sterling equivalent of your debt.
