All Topics / Overseas Deals / Getting a mortgage for an overseas property

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  • Profile photo of rudo1phrudo1ph
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    @rudo1ph
    Join Date: 2008
    Post Count: 38

    I am looking at buying a property in the UK. I may have the cash to do it, but if I needed a small mortgage, who could I approach about it? Would I need to talk to the banks in the UK or would an Australian bank loan me money?

    Any advice would be much appreciated.

    Rudi

    Profile photo of TerrywTerryw
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    @terryw
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    Rudi

    You would have to talk to a bank over there. Australian banks wouldn't be able to take it as security – except maybe aussie banks operating in the UK

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of rudo1phrudo1ph
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    @rudo1ph
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    thanks for that Terry.

    Rudi

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
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    NAB own Yorkshire Bank and Clydesdale in the UK however operate them totally independantly.

    Why not try someone like John Charcoal.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of BankerBanker
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    @banker
    Join Date: 2010
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    NAB or ANZ; private / business banking. One lender takes the security and issues a standby LC (bank to bank guarantee) in favor of the other bank. e.g. bank in UK takes the property as security and guarantees the Australia bank.

    The bank in Australia then has the guarantee as security. This is often as good as a Term Deposit. If the standby LC and the loan are in the same currency you can borrow up to 100%. If the currency is different you will have a lower LVR and potential margin calls.

    Min loan $1.0M
    Min net income $250k
    Min net assets $2.0M

    More common in the Asian markets e.g. ANZ Singaporeans buying Aust property. If they are different banks you will need to convince the overseas bank that you can service their debt if the guarantee is called upon. ANZ to ANZ not a problem however they specialise in asian markets – not sure about the UK.

    In the current market – good luck but I would look for something else. If you meet the 3 bullet points above you will need to put down approx $25,000 as a fee for credit assessment – not refundable if declined.  

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    If you meet the 3 bullet points above you will need to put down approx $25,000 as a fee for credit assessment

    Or as i said you could approach John Charcoal and then wont charge you anything.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of BankerBanker
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    @banker
    Join Date: 2010
    Post Count: 371

    Yes Richard – using someone in the uk is far cheaper in this example. Just explaining how it works, the critera and cost to expect to do it in oz. Gives readers the ability to strike a line through the Aussie option – and understand why it’s not viable.

    Worth pointing out for a larger client with trade relationships already establised (preferably an importer or exporter) – an LC can be as cheap as a few hundred dollars. Therefore this select group of people have the advantage of being able to invest offshore through an Aussie bank.

    There are similar advantages to clients that do business in US dollars . E.g. If you have a $US dollar account with your Aussie bank you can get a loan or Overdraft at US rates.

    Moral of the the storey – you have 40 properties. Find something to import Or export to or from the US. If you can generate significant income or expense in $US you can get you loans switched to US currency ( a trade finance banker will understand there is logic in having your loans in the currentcy you get paid in).

    This is the overseas investment part of the forum isn’t it –

    Banker

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    Very true and totally agree but most of the forum readers probably wouldnt qualify.

    Thankfully as i only have loans on less than 15 of my properties now and whilst i still earn an income from  UK wouldnt go to the trouble of a LC.

    Point taken but not for your average small investor.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of sparky59sparky59
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    @sparky59
    Join Date: 2010
    Post Count: 15

    Hello,

    If you are still interested in a UK mortgage, please contact me.  I have a contact in the UK that specialises in this area.

    Regards,

    Steve
    email: [email protected]

    Profile photo of paulashorsepaulashorse
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    @paulashorse
    Join Date: 2010
    Post Count: 1

    G'day

    I am an American who has been living in Australia for the last 15 years.  I am thinking about trying to buy  a bank owned or foreclosed home in the USA as an investment. I rang our bank to ask them if they had any other clients that invested in overseas properties but they told me NO, that THEY DON'T HOLD SECURITIES ON ANY PROPERTIES OVERSEAS.

    Now I am wondering why won't Australian banks hold securities on properties overseas?

    Does anybody out there know the reason for this?

     I am just curious that's all.

    Profile photo of MarJacMarJac
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    @marjac
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    Post Count: 71
    paulashorse wrote:
    G'day

    I am an American who has been living in Australia for the last 15 years.  I am thinking about trying to buy  a bank owned or foreclosed home in the USA as an investment. I rang our bank to ask them if they had any other clients that invested in overseas properties but they told me NO, that THEY DON'T HOLD SECURITIES ON ANY PROPERTIES OVERSEAS.

    Now I am wondering why won't Australian banks hold securities on properties overseas?

    Does anybody out there know the reason for this?

     I am just curious that's all.

    Easy answer would be its just to hard as most Aussie Banks have little knowledge or expertise in the US/OS Market i.e. NAB got rather burnt in the late 90's / early 2000's with their Homeside Lending venture.
    Also from only the little I hear or take note of the US property market at the moment may not be considered stable or positive
    and Aussie Banks do tend to be conservative in their residential lending policies

    Also the legalities could be complex (expensive) i.e.:

    A debt in Australia with security being overseas, some jurisdictions overseas may not recognise proof of debt in another country which may be required (as it is in Aust) to exercise power of sale, cost of legal expertise involving international law would be cost prohibitve

    In some US states having no recourse mortgages, Banks may foreclose but can't recover any shortfalls

Viewing 11 posts - 1 through 11 (of 11 total)

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