hexland

Hello all,

Having moved to LA about 8 years ago now (married to a US Citizen, and now holding a Green Card) - I find myself in need of a fairly sizeable cash injection... I still have my old house back in Scotland (currently rented out), so when I was back seeing the folks last month, I popped into a number of banks to see if I could borrow some cash on the equity available on the house (there is about 20K UKP remaining on the mortgage, and the house is worth about 120K UKP in the current climate).

However, I couldn't find a single lender who was prepared to even consider allowing me to borrow because I had no UK income (other than rent payments from my tennant). I went armed with US Tax returns, and years worth of payslips showing a salary about 3x what I was earning when I was living in the UK.

Despite not living in the UK for over 8 years now, I've still never missed a UK credit card payment or mortgage payment.

I asked a couple of the larger banks here in CA (Chase, Wells Fargo, BoA) about the possibility of a HELOC or loan secured on a UK property, and no one was able to help.

I also approached HSBC (I figured that having both UK and US offices local to both my respective residences would improve my chances) - but I just got the run around, and eventually a resounding NO.

I'm only looking for around $30k -- so we're not talking 6 figures or anything... any suggestions on what options are available?

Thx

Pulaski

I'm not surprised - the problem is that US lenders don't a way to record the mortgage securing a loan on a property in another country. The only way to achieve what you want is to borrow the money in the UK. As you clearly have a lot of equity you should be able to either get a second mortgage or refi to a larger first mortgage (I suspect the refi option will be easier and likely have a lower interest rate).

PegsC

You should really apply an international mortgage in the UK instead of applying it through US

mikelincs

see the OP, he has tried that and been turned down because he has no UK job or income apart from the rent.

Pulaski

Sorry, yes, I had seen that but I had forgotten by the time I posted my reply.
That said, it sounds like he is dealing with the owner-occupier mortgage people, who would have a problem lending to someone without payroll income, as opposed to rental-investment mortgages that would look at the fundamentals of the rental property. However, given the state of the UK economy, and the bath that most British banks took in 2008-2009, it may be that mortgages on rental properties are no longer available. And even if they are, I'd bet that getting a "cash-out" refi is at best unlikely. .... Which is still better than the chance of getting a US bank to secure a loan on a property in the UK, which I'd estimate to be zero at best.

marbella-james

There is an offshore bank that would look at a UK remortgage but taking into account your US income, i can pm you the details if you wish.

hexland

Yes please, I'd appreciate that.

I looked into LloydsTSB Offshore (since my primary account if with LloydsTSB) -- but the minimum borrowing was 100,000 UKP -- which is far too much -- I don't need anywhere near that!

ian-mstm

You might not need it, but that doesn't mean it's not a good idea! Borrow the $100K, use what you need, deposit the rest, and pay back the loan. If the other $70K is earning interest, you might be able to walk away with very little out-of-pocket expense! Just a thought!

Ian

Giantaxe

Lloyds is apparently pulling out of this business:

http://www.telegraph.co.uk/finance/p...mortgages.html

I regret not buying a UK property when financing was a piece of cake. Going to be very difficult now other than an all-cash purchase.

Pulaski

I'm not sure what the mortgage rates are in the UK, but they're likely in the 5% range (or greater), but I sincerely doubt you could earn more than 1% on a deposit without putting the principal at risk. What would be possible is to take the excess and pay off any other debts, such as any US mortgage or credit card, then you would "earn" the interest expense avoided, say, 4% on a US mortgage. But this would expose you to exchange rate risk i.e. if the dollar falls relative to GBP you could end up having to find more than roughly $1.6 you currently need to buy each pound. The rate has been in or around the $1.40-$1.70 range for past three years, and for much of the 1990's but was up around $2/£1 during 2007-2008 and in the $1.70-$2 range for much of the late 80's and early-mid 90's. It was much higher still in 1980, mostly above $2.30. I think the chance of exchange rates being that volatile are small, but I wouldn't bet £70k on them being stable either!

ottotheboar

We have a house in the UK with a small mortgage paid for by the rent.
The Halifax will not consider any type of loan as is classed as a "but to let"
property.