Post by Sapphire Capital on Jul 11, 2008 23:55:18 GMT 4
This is not an offer just a sample of what to expect when looking for a multi-currency mortgage. Such mortgages are for the very sophisticated investor only, they need daily attention and understanding and very risky if not handled accordingly.
The following is a sample term sheet of a general offering by Mortgage Banks in the UK offering Expatriate Services.
Usual Multi-currency Loans - Terms & Conditions
Eligibility
Countries Available usually UK, US, Western Europe, NZ and Australia, increasingly UAE
Properties Type Residential Properties sometimes Commercialdepending on location. Mostly restricted to certain locations within selected provinces and states
Minimum Loan Size US$100,000 - or currency equivalent
Terms
Interest Cost For loans against property in UK
0.75% to 1% p.a. margin over cost of funds rate for the relevant currency
For loans against property in Australia and NZ
1% to 1.25% p.a. over cost of funds rate for the relevant currency
For loans against property in USA
1.5% to 2.5% p.a. over cost of funds rate for the relevant currency
For loans against property in Western Europe
1.25% p.a. over the prevailing LIBOR rate for the relevant currency
Interest rates are normally floating, based on a three-month Libor.
Loan Term Up to 40 years term or up to 65 years of age, whichever is earlier.
Type of loan Demand loan subject to annual review.
Financing
- Normally maximum 80% of purchase price or valuation without currency switching.
- 5% lower with currency switching.
Arrangement fee
Calculated as a percentage of the loan amount, payable upon acceptance of our formal offer letter and is non-refundable. Property in outside USA: 0.5% Property in USA: 1.0%
Commitment fee (US property only)
0.3% of the loan amount payable upon acceptance of formal letter, non-refundable
Legal fees For client's account.
Valuation fee For client's account.
Stamp duties & communication charges For client's account.
Corporate/trust borrower handling fee
0.2% of the loan amount for clients who borrow via a company or trust structure, payable upon acceptance of formal offer letter, non-refundable.
Currency Options/Switching When currency options are offered, XXX free switches per calendar year. US$XXX per switch thereafter.
Security First legal charge or mortgage over the property.
Leasehold properties Selected areas of London : min. 30 years left to run after repayment date, Non London Locations : min. 50years left to run after repayment date
Letting/Rental No additional charges or increase in interest rate.
Repayment Quarterly in arrears.
Early Repayment
No penalties for prepayment (except for fixed interest rate loans) if early repayment coincides with the interest rollover date.
Mortgage Insurance Mortgage protection life cover may be required.
Building Insurance For client’s account
Documentation requirements
1. Photocopy of ID Cards or passports (with photo and signature pages) of
borrower(s)/guarantor(s)/owner(s) together with residential address proof.
2. Proof of income i.e copy of latest 2 years tax return/assessments, latest salary advice, employment contract or confirmation letter, last 2 years audited accounts, etc.
3. Last month’s deposit receipts, bank statements, investment valuations, etc to support items listed above.
4. Estate agent’s/developer’s brochure, including price list.
5. Copy preliminary purchase agreement (if available).
6. Copy existing tenancy or rental agreements or bank statements for all properties enjoying rental income.
7. Copies of up-to-date loan, overdraft & current account statements.
8. Brief background of employing company (e.g corporate brochure or website address if available).
9. Current building insurance (refinancing only)
As far as I know SVB bank in the US offers such solutions to their clients (http://www.svb.com/index.asp) but most large banks have departments for this but require a specific relation and high amounts (not your usual product in the US and currently very tightly looked at), Alexander & Associates used to offer them in the UK (http://www.aag.co.uk), RBS offers them (http://www.rbs.co.uk/Corporate_Banking/Financing/Loans/Currency_Loans/default.htm), TSB Loyds and I believe HSBC Singapore, just to name a few, amounts and terms vary and there are brokers around the world specialising in them such as LTSB who works out of HK, Malaysia, Shanghai and other Far Eastern locations.
The following is a sample term sheet of a general offering by Mortgage Banks in the UK offering Expatriate Services.
Usual Multi-currency Loans - Terms & Conditions
Eligibility
Countries Available usually UK, US, Western Europe, NZ and Australia, increasingly UAE
Properties Type Residential Properties sometimes Commercialdepending on location. Mostly restricted to certain locations within selected provinces and states
Minimum Loan Size US$100,000 - or currency equivalent
Terms
Interest Cost For loans against property in UK
0.75% to 1% p.a. margin over cost of funds rate for the relevant currency
For loans against property in Australia and NZ
1% to 1.25% p.a. over cost of funds rate for the relevant currency
For loans against property in USA
1.5% to 2.5% p.a. over cost of funds rate for the relevant currency
For loans against property in Western Europe
1.25% p.a. over the prevailing LIBOR rate for the relevant currency
Interest rates are normally floating, based on a three-month Libor.
Loan Term Up to 40 years term or up to 65 years of age, whichever is earlier.
Type of loan Demand loan subject to annual review.
Financing
- Normally maximum 80% of purchase price or valuation without currency switching.
- 5% lower with currency switching.
Arrangement fee
Calculated as a percentage of the loan amount, payable upon acceptance of our formal offer letter and is non-refundable. Property in outside USA: 0.5% Property in USA: 1.0%
Commitment fee (US property only)
0.3% of the loan amount payable upon acceptance of formal letter, non-refundable
Legal fees For client's account.
Valuation fee For client's account.
Stamp duties & communication charges For client's account.
Corporate/trust borrower handling fee
0.2% of the loan amount for clients who borrow via a company or trust structure, payable upon acceptance of formal offer letter, non-refundable.
Currency Options/Switching When currency options are offered, XXX free switches per calendar year. US$XXX per switch thereafter.
Security First legal charge or mortgage over the property.
Leasehold properties Selected areas of London : min. 30 years left to run after repayment date, Non London Locations : min. 50years left to run after repayment date
Letting/Rental No additional charges or increase in interest rate.
Repayment Quarterly in arrears.
Early Repayment
No penalties for prepayment (except for fixed interest rate loans) if early repayment coincides with the interest rollover date.
Mortgage Insurance Mortgage protection life cover may be required.
Building Insurance For client’s account
Documentation requirements
1. Photocopy of ID Cards or passports (with photo and signature pages) of
borrower(s)/guarantor(s)/owner(s) together with residential address proof.
2. Proof of income i.e copy of latest 2 years tax return/assessments, latest salary advice, employment contract or confirmation letter, last 2 years audited accounts, etc.
3. Last month’s deposit receipts, bank statements, investment valuations, etc to support items listed above.
4. Estate agent’s/developer’s brochure, including price list.
5. Copy preliminary purchase agreement (if available).
6. Copy existing tenancy or rental agreements or bank statements for all properties enjoying rental income.
7. Copies of up-to-date loan, overdraft & current account statements.
8. Brief background of employing company (e.g corporate brochure or website address if available).
9. Current building insurance (refinancing only)
As far as I know SVB bank in the US offers such solutions to their clients (http://www.svb.com/index.asp) but most large banks have departments for this but require a specific relation and high amounts (not your usual product in the US and currently very tightly looked at), Alexander & Associates used to offer them in the UK (http://www.aag.co.uk), RBS offers them (http://www.rbs.co.uk/Corporate_Banking/Financing/Loans/Currency_Loans/default.htm), TSB Loyds and I believe HSBC Singapore, just to name a few, amounts and terms vary and there are brokers around the world specialising in them such as LTSB who works out of HK, Malaysia, Shanghai and other Far Eastern locations.