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How does earning in a different currency affect your lending prospects?

Can owning multiple homes make remortgaging more difficult?

 Profile

Despite Brexit and the global COVID-19 crisis, UK property continues to be an attractive investment and, at the end of last year, Hamptons International reported that 11% of the UK buy to let market was owned by investors based abroad[1]. A number of these will be ex-pats – British nationals now living overseas who want to retain a foothold in the UK in the form of investing in property.

One of our specialisms is in helping ex-pat clients, whose situations can quickly become complicated by their location, residency, and the currencies they receive in income and hold in capital reserves.

We recently worked with a client looking to purchase a £3.5m property in the UK. Their annual six-figure salary was paid in Euros but did not reach anywhere near the income multiples that banks would allow to borrow against this substantial amount. However, they owned a sizeable asset in the form of a multi-million-pound property in Germany, with plans to sell in the coming years. They also had +£1m cash in the bank.

Solution

Our Associate Director Paul Fredericks approached a private bank with a lending option which would provide a facility, meaning that the client would put two years’ worth of mortgage payments on deposit to give the lender the assurances they needed. On negotiation, the client decided to put a further year’s payments on deposit to mitigate any delays in selling their German home.

Yet again, our knowledge of the market and the ability to think around the challenge led to a positive result.

 If you are looking to secure a mortgage or remortgage which might not fit ‘standard’ requirements, why not get in touch with our specialist team of advisers?

  

Your home or property may be repossessed if you do not keep up repayments on your mortgage. Changes in the exchange rate may increase the sterling equivalent of your debt.

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