Lenders' Criteria for a Currency Mortgage
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Clients who have previously made mortgage arrangements in the UK may be pleased to learn that the bank's credit committees will assess each application for a foreign currency mortgage and consider the full circumstances of each case.
The administration of currency loans is very similar to traditional sterling loans. The lender will need to verify personal earnings and any Offer of Loan will be subject to a satisfactory property valuation.
Currency Mortgage with Currency Switching
Currency switching facilities may be available and terms vary from lender to lender. The LIBOR base of your loan will determine the speed with which a switch can take place.
Considering Assets in a Currency Mortgage Loan Application
In some circumstances, lenders may adopt a flexible approach towards risk. They are aware of the intricate nature of a high net worth client's income and will consider an individuals asset base. Loans, which exceed 65% of the property value, may be considered if additional collateral security is available.
Because currency loans carry an inherent risk, lenders operate within criteria which allows for adverse economic conditions.
Self-Certification of income is not acceptable.
General criteria for a foreign currency mortgage application:
- Minimum annual income requirement £100,000 or Sterling equivalent
- Max loan equivalent to 3 times annual individual income or 2.5 times joint
- Maximum loan up to 70% of the property value.
- Minimum loan of £250,000 or Sterling equivalent
- Customers should not be over-extended in terms of personal assets / liabilities
- Accountants, employers and bankers references will be required
- The lenders will consider Buy to Let applications provided the property is let to individuals (not HMO) on a Assured Shorthold Tenancy
Early Reduction or Redemption of a Currency Mortgage
Loans can be reduced or redeemed without an Early Repayment Charge after twelve months. If you wish to redeem the loan earlier, a charge may be payable to cover the lenders costs. This could be as little as £500
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Your home may be repossessed if you do not keep up repayments on your mortgage. Mortgages secured on overseas property are not regulated by the Financial Services Authority. |
The Sterling equivalent of your liability under a foreign currency mortgage may be increased by exchange rate movements. Changes in exchange rates may increase the Sterling equivalent of your debt. |
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