I was recently contacted by a client who had previously spoken to another broker who was unable to provide a solution at all for her circumstances. This client was a 64-year-old Brit living and working in Los Angeles – and had done so for the last 20 years. She was looking to secure a £320,000 loan to purchase a £580,000 buy to let property in Islington, North London.
It quickly became apparent during our initial conversation that my client had a specific geographical radius within which she was looking to buy. She had recently been gazumped by a cash buyer and was looking to avoid a repeat of that, so being in a position to act quickly once she found a suitable property was very important to her.
In actual fact, it turned out to be less than a month until she found a new property. Funnily enough, the purchase opportunity arose from the vendor of this property losing their buyer, which meant concluding the transaction in a timely manner was important to both parties.
Every buy to let lender has a different ‘stress test’ calculation which essentially dictates the maximum loan size. For expat borrowers, these stress tests are generally higher which, in turn, leads to a reduced maximum loan. Several lenders will also look at, and perform, a worldwide affordability assessment which can cause challenges when clients own mortgaged property overseas – my client had a significant US mortgage.
In sourcing a product, discussions naturally take place with lenders to assess their appetite to lend given the general client circumstances. In this instance, prior to submitting a full mortgage application, I presented case specifics to an underwriter directly and pre-empted questions that I knew would later be raised and slow the process down. This meant that by the time a full mortgage application was submitted, the underwriter was already comfortable with the structure and allowed things to proceed quickly. This was exactly what my client needed given the current borrower stampede ahead of upcoming stamp duty changes.
I was able to secure an interest only loan with a 5.39% discounted variable rate on a 10 year term with no early repayment charges, which means upon her return to the UK, I will arrange a residential remortgage at a conventional interest rate (as it will be cheaper once she is a resident here). My client was understandably delighted being able to complete exactly 4 weeks from the date of mortgage application.