Case Study: Expat Buy-to-Let Remortgage with Capital Raising
USA-based British expat – London BTL remortgage with Staircasing
- British expat
- Buy-to-Let mortgage
- Capital Raising for Staircasing to 100% Ownership
- Based in USA
- Employed
- £270k Mortgage
Clients situation
- Living overseas for 2 years
- Income paid in foreign currency
- Unsure which lenders would consider the application
Main challenges
• Overseas income – paid in US Dollars
• Documentation requirements – source of wealth and other specific requirements linked to consolidation of Help to Buy equity loan
• Limited lender choice due to classification as Consumer Buy-to-Let, debt consolidation and stress test applied to rental income
How Kathryn helped
• Reviewed circumstances
• Recommended suitable lender
• Explained documentation requirements
• Managed application from start to finish
• Liaised with lender and solicitor
Outcome
• Mortgage approved
• Client successfully mortgaged on to expat product
• Staircased to 100% ownership without having to fund from savings
Kathryns Key Takeaway – Some lenders offer enhanced stress tests for eligible expat landlords. Applying this strategy can be beneficial in situations where extra funds need to be raised and the rental income is not sufficient for the required loan amount under standard interest coverage ratios. In this case, the client needed to consolidate a Help to Buy Equity Loan he took out when he originally purchased the property, to Staircase to 100% ownership. Speaking to a knowledgeable and experienced broker who can quickly identify lenders who offer this facility can be the difference between success and failure.
Case Study - Singapore expat – Devon holiday let remortgage
Singapore British expat – Devon holiday let remortgage via UK Ltd company
- British expat
- Portfolio Landlord
- Holiday Let mortgage
- Limited Company Ownership
- Based in Singapore
- Employed
- £235k Mortgage
Clients situation
- British expat
- Portfolio Landlord
- Limited Company Ownership
- Living overseas for 8 years
- Income paid in foreign currency
- Unsure which lenders would consider the application
Main challenges
• Overseas income – paid in Singapore Dollars
• Documentation requirements – property was purchased at auction and renovated thereafter, needed schedule of works and other specific requirements linked to auction purchase and status as portfolio landlord, bridging loan needed to be redeemed so application was time critical
• Limited lender choice due to Limited Company, Holiday Let, Portfolio Landlord, property situated next door to a pub
How Kathryn helped
• Reviewed circumstances
• Recommended suitable lender
• Explained documentation requirements
• Managed application from start to finish
• Liaised with lender and solicitor
Outcome
• Mortgage approved
• Bridging loan successfully redeemed
• Client’s 4th property successfully mortgaged on more conventional product with 25 year overall mortgage term, in line with their investment objective for the property portfolio of long-term capital growth and rental yield to support their retirement.
Kathryns Key Takeaway – More landlords are choosing to invest in property through a limited company structure but the choice of lending options available for expats in this space is restricted. Limited company and holiday-let applications are subject to specialist lending criteria, so engaging early with a broker who can identify a lender that fits the company structure, property type, usage and projected rental income is crucial.
Case Study -Saudi-based British expat – Surrey purchase
Saudi-based British expat – Surrey purchase with 20% deposit
- British expat
- Residential mortgage
- Part Interest Only part Capital & Interest Repayments
- 20% Deposit
- Based in Saudi Arabia
- Employed
- £1,2m Mortgage
Clients situation
- British expat
- Living overseas for 10 years
- Income paid in foreign currency
- Unsure which lenders would consider the application
Main challenges
• Overseas income – paid in Saudi Riyal
• Documentation requirements – large loan application required sign-off by lender’s Head of Mortgages
• Limited lender choice due to Saudi Arabia as country of residence, 20% deposit and requirement for interest only repayment method
How Kathryn helped
• Reviewed circumstances
• Recommended suitable lender
• Explained documentation requirements
• Managed application from start to finish
• Liaised with lender and solicitor
Outcome
• Mortgage approved
• Property purchased successfully
• Client’s family able to relocate back to the UK while he continued to live and work in Saudi Arabia
Kathryns Key Takeaway - Interest-only repayment options are available for residential mortgages, but choices are more limited and lending criteria are typically stricter for expats. In this case, we identified a hybrid product that allowed 65% of the loan on an interest-only basis, with the balance on a capital-and-interest repayment basis. As well as helping to stretch affordability, this structure supported the client’s objective of keeping their monthly payments to a minimum.
Case Study - British Expat in Dubai Buying new build in UK
British Expat in Dubai Buying a UK Buy-to-Let Property in a New Build Development in Manchester
- British Expat
- · Buy to Let
- · New Build in Manchester
- · UAE
- · Employed
- · £175k Mortgage
- · Offered in 7 Weeks
Clients situation
- · Living overseas for 4 years
- · Wanted to buy first investment property in the UK
- · Income paid in foreign currency
- · Unsure which lenders would consider the application
Main challenges
- · Overseas income – paid in UAE Dirham
- · Documentation requirements – source of wealth & employer’s letter confirming remuneration and basic terms of contract
- · Limited lender choice due to stress test applied to rental income and status as first time landlord
How Kathryn helped
• Reviewed circumstances
• Recommended suitable lender
• Explained documentation requirements
• Managed the application from start to finish
• Liaised with lender and solicitor
Outcome
• Mortgage approved
• Purchased property successfully
• Client able to acquire first UK investment property with the primary objective of achieving long-term capital growth
Kathryns Key Takeaway - Buying a new build with a mortgage can have additional stress points as developers tend to be inflexible and often impose strict deadlines. It is therefore important to find and engage with a broker early in the process as they can help with managing the developer’s expectations and keep you on track. This is even more fundamental for expat applications which can be more complex and take longer.
