The client is an ex-pat who has been living in the Far East since the early 90s, working for a multi-national company. He owns four properties in the UK, three of which are let out. He was looking to raise capital against one of these - a one-bed rental flat in London, to fund a further buy to let purchase in the UK.
The flat is in excellent condition, located in East London and is currently tenanted by a working couple.
There were two main challenges for us with this enquiry:
1. Not many lenders will accept ex-pats who have lived abroad for more than five years because the ex-pat’s credit footprint is likely to be sketchy which makes it hard for the lender to take a confident risk-based lending decision.
2. The fact that the client lives in South Korea was a potential problem because this country is off the radar for many lenders.
We approached a lender that makes human rather than computer-based underwriting decisions and put forward a proposal which showed that the client could demonstrate:
• Extensive buy to let experience
• A reasonably lowly geared property portfolio
• He held a senior position with a multi-national corporation
• He had a good UK credit record.
Consequently, the lender agreed to the following terms.
Property value: £330,000
Loan amount: £200,000
Loan to value: 66%
Rate: 4.49% , SVR (5.49%) minus 1% for the life of the loan (SVR tracker)
Term: 20 years capital & interest
Monthly mortgage payment: £1,264
Monthly rental income: £1,180
Annual gross yield: 4.29%
Lender arrangement fee: 1% of loan amount (£2,000)
Completion date: Est. June 2015
Consultant: Gavin Elley
Tel: 01625 416398