BTL Mortgage from Australia

[Craig Lee]

Hi,

 

I need some advice as I appear to be struggling with remortgaging my UK property from Aus.

 

I currently have loads of equity in my property in Bolton and seem unable to gain access to it.  I am currently with NRAM so no chance of approaching these guys.

 

I wish to release some equity to buy some more property - but nobody wants to lend to me.

 

Please help.

 

Cheers

 

Craig

[James Lambden]

Hi Craig, 

 

Yes you are correct in your assumption that there is little reason in approaching your existing lender.  NRAM (formally Northern Rock Asset Management Plc or as they are sometimes known "the bad bank") is basically a state owned holding company and its only role is to deal with the run off from the previous Northern Rock Plc mortgage book, which had a large proportion of "bad" mortgage debt.  It does not offer new products and is concerned mainly with administering current loans and wrapping up the mortgage book in the shortest possible time for the least cost.  This happens through repossessions of properties mortgaged during the crazy 2005-08 period (when 125% loans were common) and also when people look to remortgage to another product or sell the property.

 

With regard to lending as you are not in the country, and with the tightening of lending criteria over recent years mainstream high street lenders will likely to be reluctant to deal with you as you don't easily fit into the "box ticking" exercise that they use to assess lending. 

 

I assume that as you are in Aus you have already converted your mortgage to a BTL one or got permission from NRAM to let the property in the past.  Either way it seems likely a BTL mortgage is now your only option for finance going forward. 

 

Because of your circumstances I would suggest that the best way for you to try and get lending would be to use a broker, as they really do have access to more products than the average man in the street (or in Auz in your case) can get by going direct to lenders.  I have found that brokers are particularly useful for non standard situations, such as  my situation as a contractor and i suspect that ex pats could be a similar situation. 

 

I can provide a recommendation for a broker and i suspect other Hub members will also be able to help with recommendations too if needed. 

 

Hope this helps.

 

James

[Craig Lee]

Hi James,

 

Many thanks for your reply.

 

I have tried multiple brokers without any real success.  My first stop was the broker recommendations on www.moneysavingexpert.com and then used to Google to try a couple others without success.

 

Would appreciate if you can recommend someone.

 

Thank you.

 

Craig 

[Craig Lee]

Hi James,

 

Thank you for your response - much appreciated!

 

I have tried numerous brokers without success - first stop was L&C (as recommended on moneysavingexpert) and various others after that.

 

I am able to report some success.  Last night I got in touch with Capital Fortune (google Capital Fortune) and they certainly sound hopeful.  The choices are limited and you have to pay around 1500 pounds to Capital Fortune plus there are costs to be paid to the mortgage provider.  However it is progress.

 

If anyone knows of any other companies that can be contacted it would be much appreciated.

 

Craig

[James Lambden]

Hi Craig, 

 

No worries at all, i had a quick look at Capital Fortune and the fee does seem to be somewhat high but you always have to pay a fee to your broker when you are in out type of non standard situation, its a cost of doing business I'm afraid.  

 

As for brokers, give Trevor Leyland of Leyland finance a shout and see if he might be able to help, he has helped me with a couple of deals and is very quick. 

 

Trevor Leyland

Financial Adviser

Leyland Finance Limited

7 Ryton Close, Blyth, Worksop, S81 8DN

www.leylandfinance.co.uk

T. 01909 591068

F. 01909 591006

 

Do keep us updated on how you get on as its always good to learn how to deal with theses types of tricky situations.

 

James

[Kevin Wright]

An excellent summary of the situation and objectives of NRAM James. In common with Mortgage Express, NRAM exist solely to close down every mortgage on their books in the shortest time possible. This will be through expiry of the term (not many of those as many still have 15 years + to run); remortgage to a different lender (not many here as a lot of the book is still geared above 75%); forced repossessions (their major focus) as they hit on anyone who raises their head above the parapet by missing a payment or brings themselves to NRAM's attention in any other way.

 

If you are low geared and have never missed a payment Craig, you are probably way down NRAM's list of borrowers to target. Nevertheless, it is highly unlikely that they will allow your mortgage to run its full term.

 

As you have plenty of equity in the property, presumably that means less than 75% geared, it would certainly be advantageous to get yourself away from NRAM, to a lender that has a more normal trading view i.e. they still lend money.

 

Your problem Craig, as you have no doubt discovered by now, is that BTL lenders only lend to borrowers currently resident in the UK. Thus you fall over at the first hurdle with every mainstream BTL lender.

Your choice of country to reside in gives you an additional barrier to overcome. The Australian Government has a regulation that prohibits its citizens being chased for debts (certainly mortgage debts) run up in foreign countries by the financial institutions of that country. Thus Australians can, in theory, do a runner back to Australia dump the responsibility for paying their mortgage and there is diddly squat the mortgage lender can do to chase them. I understand this also extends to foreign nationals resident in Australia.

There are specialist lenders, some overseas, that will consider BTL mortgages for non- UK residents and foreign citizens. Lending is usually capped at 70% ltv, sometimes less. I have sourced mortgages for people in this category in the past. There is also a UK based lender that will do a 5 year term mortgage that I have used before for this class of borrower. These would be useful if you intend to return to the UK within the next 5 years; meaning you could remortgage onto a standard BTL loan at the end of the 5 years. However, the rate they charge is dearer that you would normally expect to pay on standard BTL mortgages; not your first choice lender certainly but, if all else fails, they will come up with the goods.

Regarding the £1500 fee to Capital Fortune, when is it payable? Is it £1500 up front and then they source a mortgage for you; or part up front and the balance payable when you have a mortgage offer. Is this a fixed fee regardless of the size or your loan, or a percentage of the loan; or is £1500 their minimum for your type of client? As James says, you will have to pay a broker fee and a good brokers knowledge is generally worth paying for someone in your situation. You just want to ensure that you don't end up having paid the fee but still have no mortgage offer.

[Craig Lee]

Hi James/ Kevin,

 

Thank you so much for your responses - I have made some great progress over the past couple of days with a lender called Charcol - www.charcol.co.uk.

 

Their fees are a min of 495 pounds but more likely to be about 1-1.5% - they quoted me around 1250.  Which is 150 pounds once I have a mortgage offer, then the remainder once the loan has been finalised.  They believe that I can get 75% LTV and a loan around the 5% mark.  This is great.

 

So at the moment I am going through the throws of filling in paperwork and starting the process.  I will keep you all updated on how it goes as these guys may be the people to use if you are in Australia.

 

Thanks for all the help so far - much appreciated.  James if these guys fail then I will give your man a call.

 

Cheers

 

Craig 

[jimbo17q]

+1 for Charcol. They did for the same for me a few years back as I'm also based overseas.

May I ask is it interest only or interest+capital?

[Craig Lee]

Hi Jimbo,

 

I am applying for Interest only - I noticed however on the Fact Finder that Charcol view interest only as high risk.  Will see how I get on.

 

Craig

[Craig Lee]

Hi All,

 

Just thought I would give a quick update on where I am with this remortgage of my UK property whilst living in Australia.

 

It has taken awhile but Charcol have come good and I have a mortgage offer and am currently trying to complete.  So great news.

 

But I have found out the best way to remortgage or get a mortgage if you are living overseas (Australia).  Rob Bence mentioned to me that his clients use the HSBC.  I looked into this and if you are able to set up a premier HSBC account in the country that you live in then HSBC will allow you to use their mortgage services in the UK (or indeed anywhere in the world).

 

To hold a premier account you need to meet certain criteria.  For me this means switching my Australian home mortgage to the HSBC.  I will do this for my next property purchase in the UK!

 

Craig

[jimbo17q]

Hi Craig

 

1) What's the interest rate you're getting and what the LTV?

 

Thanks for the HSBC premier tip, will see what's possible.

 

thanks

 

jim

[Craig Lee]

Hi Jim,

 

The interest rate from John Charcol is 5.39% LTV 65% with Saffron BS.

 

HSBC is the way to go - the only issue I have is that I would have to change my Aus mortgage to HSBC and incur Lenders Mortgage Insurance as my LTV on my house is just over 80%.

[jimbo17q]

Funny. All the time I was with HSBC Premier and they never hinted its possible.

 

Tried an expat mortgage broker and they gave me 3.x% as the lowest but that's around 60 LTV I think. No interest ply unfortunately.

[drwardle23]

Hi,

I'm in a similar situation - trying to purchase a BTL property from Australia (UK resident still).  I'm also struggling to secure a mortgage.  Its getting pretty frustrating!

 

Which expat mortgage broker did you use jimbo17q?

 

I'll also try and contact Charcol.  HSBC wouldn't be an option for me currently.

 

Regards.

 

Steve.

[Craig Lee]

Hi All,

 

Time for another update.

 

John Charcol have been a huge disappointment - the remortgage (although taken 5 months to complete) went through ok.  However, I was using funds from the remortgage to buy another property through RMP.  I spoke to my broker at John Charcol and sent him all the details of the property I was interested in purchasing.  He came back to me and gave me the big thumbs up to proceed.

 

After having everything accepted and paying my deposit and fee's everything looked rosy.  Four weeks later the broker phones me to tell me that I cannot get a mortgage for the property because the purchase price is too low.  This has left me in serious trouble and out of pocket by quite a lot of cash.  Very poor performance I think from John Charcol.  Although the broker was putting all the blame at the lender, I personally feel that he had not checked properly.  He also then took 4 weeks to get his act together afterwards - so I will not use them in the future if at all possible.

 

Hope this helps everyone.

 

Craig

[Kevin Wright]

what is the purchase price of you new property Craig?

[Craig Lee]

Hi Kevin,

The purchase price is 83k.

Cheers

Craig

[Kevin Wright]

That link came up with

 

Oops, the page you are looking for cant be found

 

Richard

[AntoineDAmore Damore]

A lot of these expat mortgage services are only applicable to UK citizens living overseas. I am non-Uk citizens, living overseas and trying to invest in BTL in the UK. a bit of a nightmare to find lending these days. HSBC indeed seem to be the one and only option.

 

I have been testing the options with about 6-7 mortgage advisors, all specialized in expat/foreign mortgage but without success.

 

Now I am a bit surprised by the info from Craig that the lender refused to lend due to ' too low' property price. I have indeed seen that in few blogs around. Any one can shade some light on the 100k mark for mortgages? Does it make it significantly more difficult to get lending for properties below 100k?

 

thanks

Antoine

[Craig Lee]

Hi ChristopheD,

 

Actually I found HSBC to be good.  I only needed to upgrade my account to an advanced account and the mortgage application process was fairly painfree.  I ended by a BTL in Wrexham.

 

Cheers

 

Craig

[ozdrjohn]

hi everyone - am just starting out on the same journey trying to borrow from oz and facing the same levels of confusing information. following earlier posts, have contacted hsbc so hopefully they can get me on track to buy some england BTLs. thanks everyone for sharing their knowledge on this topic and will let you all know how it goes - fingers crossed!! cheers, john

[Craig Lee]

Hi John,

 

If you start hitting some roadblocks - get in touch and I will share some of my experiences with you.  It certainly wasn't easy to set up - but now that I am all set up - its seems to be really smooth (touch wood).

 

Good luck!

[Orla Shevlin]

Hello Everyone, 

 

I am an independent mortgage broker specialising in ex-pat/ foreign nation mortgages. 

 

Please do get in touch and i will be able to assist. 

 

orla@as-financial.com

 

Kind regards, 

 

Orla