Loan: Expat commercial mortgage
Expats paid in currencies that are not sterling face enough hurdles as it is following the introduction of tighter regulation under the Mortgage Market Review. Those paid outside of the UK, no matter the currency, face even more hurdles when they want to bring capital into the country.
Anti-money laundering rules often require reams of paper-trails and money to have been in the UK for a minimum period of three or sometimes six months.
All this is understandable – it’s important that advisers don’t unwittingly serve to aid and abet criminal activity, laundering ill-gotten gains through the legitimate purchase of UK property.
However, for legitimately gotten gains, purchasing property legitimately can prove not just maddeningly difficult, it can feel impossible.
Vantage Finance was approached by a broker earlier this year, who actually specialised in expat mortgages himself. The client is paid in Hong Kong but owns a semi-commercial property with his uncle in the UK.
He wanted to raise enough finance on a commercial loan to pay his uncle out of the existing property as well as additional funds to finance further commercial investment in a property he had yet to identify.
Lucy Barrett, MD of Vantage Finance, said: "This would have been a straightforward deal had it not combined both challenges of income coming from outside the UK and the fact that the additional capital raise was intended to fund the purchase of an unknown property.
The problem for many lenders is being unable to assess the security of the additional purchase.
But this is not insurmountable – there was enough equity in the existing property to satisfy the lender that the capital raise would be a good risk regardless of the security on the new purchase meaning the client didn’t have to disclose details of that purchase when he didn’t yet know them.”
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