Buy to Let Mortgage for an Overseas Resident with Complex Income

CONTACT FARRYL

THE SCENARIO

I recently arranged a buy to let mortgage for an overseas resident whose income was slightly complex.

My client in this instance wasn’t based in the UK but he was hoping, like so many others, to tap into London’s buy to let boom. He had his eye on a property with a purchase price of £700,000, and needed to raise a loan of £500,000 to finance it.

He had dual British and Australian nationality, but was living and working long term in the US.

He had an account with a major high street bank in the UK, and he had approached them first to ask for a loan. They had turned his application down for a number of reasons. His income was in dollars, which is a problem for many mainstream lenders, and the first challenge for me was therefore to find a lender who would accept foreign currency income.

On top of that, his finances were slightly complicated. He had recently sold a successful US-based business, meaning that he had extensive funds available in the short term but little evidence of what his income would be going forward. Although there was historical evidence of an excellent salary, the lender would need to feel confident that he would continue to earn at a decent rate, and that was going to be very difficult for us to demonstrate.

As it happened, my client still had a 25% share in his old business, and I was hopeful that we would be able to use the dividend payments to persuade a lender. I had a lender in mind who I thought would both accept an overseas borrower and take a generous view of his income.

The property, however, was down-valued, which resulted in the loan being reduced. This particular lender has a minimum loan of £500,000, but thanks to our strong relationship with the bank they agreed to make an exception.

OUR SOLUTION

The lender was happy to lend to an overseas client and accepted the dividend payments on his share of the business as income, as long as they received 12 months’ worth of interest payments upfront. The loan I secured was a tracker at 3.99%, and my client was delighted.