Area: London
Amount raised: £2.52 Million
The scenario
We were approached by a client who worked for a well-known investment bank. They had been living and working in Singapore for several years, but they wanted to relocate back to the UK. They were currently earning in Singapore Dollars and received a basic salary and annual bonus payment. Once they relocated back to the UK, they would be paid in sterling, with an annual package in excess of £500,000 pa.
They had been offered a new position within the UK operations and a generous moving allowance. While they had the option to move to short-term accommodation before finding a property, they wanted to reduce disruption for their family. Their intention was to purchase a property to avoid completing multiple moves in quick succession. They had identified the right area for them based on where they wanted their children to attend school and the ability to commute into central London. To ensure that they did not lose out to domestic buyers, they wanted to obtain pre-approval so that they could move quickly on a property.
The solution
After reviewing the client’s situation and their chosen location it was decided that approval up to a purchase price of £3 million and a loan to value (LTV) of 90% would be sufficient. The client could have worked with a higher deposit, but they held some long-term investments which were better preserved.
We obtained pre-approval from a private bank which was more advanced than a standard mortgage approval in principle (AIP). This meant that the client had the confidence to make offers on a property and move quickly if required. The bank is well known in the market and the weight of their approval can certainly help a client who is looking to secure property. Without a pre-approval, as a foreign buyer, an estate agent may have less confidence in their ability to complete in a timely manner. This could impact the vendor’s decision if multiple offers are received.
The pre-approval process can take a few days and does require a full review of all the information required for a mortgage application. Where a client is moving between countries this also includes written evidence of the remuneration and terms of employment. Often clients are still negotiating this with their employer, it is something we can work on in order to obtain sufficient information without rushing this important process for the client.
The client found a large, detached property for £2.8 million and was successful in having their offer accepted. The property was recently renovated and required no work. This was perfect for the client and their family as it would mean no renovation works are required before they can move. After completion a valuation a mortgage offer was swiftly produced, and the client was able to move directly back from Singapore to their new home. They decided to maintain the 90% LTV in order to retain pre-existing investments. The loan was structured as interest only with annual capital reductions, which fit well with their bonus structure. This ensured the monthly payments were not high, but importantly the mortgage is still repaid over time.
Working with a UK-based mortgage broker is key to the approval process for this type of transaction. The established relationship and understanding of a banks appetite and requirements can be extremely beneficial to new to bank client. A UK-based broker can help communicate with estate agents and lawyers in the UK.
A broker can also advise across the entire market. So, if a more suitable lending options is available, they can propose this.
Want to know more?
This type of loan is available to permanent UK residents or clients who are relocating back to the UK. If you are in a similar situation and wanted to understand your options more. Contact Orton Financial today.