Ex-pat refinances London flat to raise capital

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