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Case Profile
We were recently presented with a case that had stymied other mortgage brokers, to the extent that the client himself was entirely without hope. Having lived in Singapore for the past 18 years, the client retained ownership of a UK property in which his brother resided. The client believed the property to be worth £450,000 with an existing mortgage balance of £147,798. The objective was to refinance onto a new rate, while also raising an additional £60,000 to make some improvements to the property.
The complications began with the client’s tax residency status. Working for an international UK-domiciled company, half of the client’s salary was paid into his UK bank account, tax-free while the other half was paid into his account in Singapore; Tax was paid on the full amount in Singapore. Complex tax setups like these can often stymie lenders.
Further complexity came in the form of adverse credit history. The client had defaulted on a credit account 3 years prior, with the amount settled more than a year after being registered. In addition to this, multiple credit card payments had been missed due to letters being sent to the UK address while the client was in Singapore. Again, this is something that many lenders will instantly decline a case for.
Solution
While some high street mortgage lenders will consider expat applicants living overseas – the issues around this particular case meant it would not be one for the mainstream banks. Using our extensive network of lenders and criteria knowledge, we were able to pinpoint some of the regional building societies that will often take a more personal approach to assessing a case.
Once we had presented the case, our broker spent a considerable amount of time personally discussing with underwriters and evidencing the reasons behind the multiple hindrances to the loan. By proving all tax had been paid in Singapore, inclusive of that due to be paid in the UK, as well as the fact our client had been with the same employer continuously for 18 years – we were able to create a stronger profile of the client than would be possible by simply looking at their documents.
Despite an initial decline decision, the more personal approach adopted by regional building societies meant we were able to show that the client had been unaware of the credit card payments that had been missed and had cleared them immediately upon discovery. No other issues had arisen in his finances for some time and after some lengthy discussions – we were able to get an approval on some great terms for the client.
Deal Highlights
| Loan amount: | £207,000 |
| Rate: | 3.89% |
| APRC: | Overall cost for comparison 4.50% APRC representative variable |
| Term: | 23 years |
| Type: | Repayment |
| Loan purpose: | Expat residential remortgage |
| Lender's arrangement fee: | 1% |
Notes
This case study is for information and illustration purposes only. It is not an offer, or suggestion of an offer. Each mortgage case is assessed on an individual basis and there is no guarantee that the solution described here can be repeated in the future.
Please note that this specific deal may not be available to – or suitable for – all customers, dependent on their individual circumstances. The rate quoted may become out of date at short notice and may not be available at the point at which customers enquire about it. This document may not contain all the information needed for customers to make a decision and they should seek advice.
Overall cost for comparison 4.50% APRC representative variable based on 36 payments at a variable rate, currently 3.89% followed by 240 payments a variable rate of 4.40% and lender’s arrangement fees of £1,250. The APRC is calculated using an assumption, the actual rate available will depend on your circumstances. Ask for a personalised illustration.
Your home or property may be repossessed if you do not keep up the repayments on your mortgage. Changes in the exchange rate may increase the sterling equivalent of your debt.
