Ex-pat raises finance on unencumbered rental property

A broker asked us for help in sourcing finance for his client - an ex-pat working for a multi-national company based in Australia. The client had inherited outright a 3-bed terrace house in Plymouth that was rented out and generating £585 per month. The funds raised were to be used as a deposit to buy a house in Australia.

The broker had been unable to access directly a lender that could help. The challenge in placing the case was not only the ex-pat status but also the fact that the client had lived abroad for five years meant it would be difficult carry out UK credit checks.

Fortunately we were able to source a lender that was willing to consider the application. In addition to the usual identity and credit checks, the client had to provide:

• A copy of his overseas work contract
• Proof of a UK bank account to be used for the rental income
• Confirmation of a UK mailing address (not the security address)
• Proof of UK citizenship
• Evidence of buy to let experience
• Proof of residency abroad
• Proof of UK residency within the last five years

The broker was able to get all the above information from his client very speedily and we prepared and submitted the application. The lender turned around the case in a very tight timescale which meant that the client was able to purchase, rather than lose, the Australian property.

Here are the details of the deal:

Property value: £125,000

Loan amount: £77,000

LTV: 70%

Rate: 5.10% fixed for 3 years

Monthly mortgage payment: £327.25

Monthly rental income: £585

Annual yield: 9.1%

Lender arrangement fee: 2%

Completion date: December 2014

Consultant: Charlie Potter, 01732 471648

NB: ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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