Hi There. I am Amanda Steadman from the UK, looking at investing in US properties on a buy to let basis that have a minimum yield of 25%. I am looking at Buffalo at the moment.
I am using a UK mortgage broker who has set up a connection with a US Broker but this is what they are telling us on the financial front at the moment, see below. I wondered if there were any other ways to creatively finance purchases or are things so tight many of us from the UK have to go either cash or 50% down. Any advice appreciated! Thanks Amanda
US Investing Overview:-
The current climate of the sub-prime mortgage market, in the wake of the American credit crunch, has led lenders to tightening their foreign national mortgage products and policies. This has made the availability of the 70%-85% mortgages, that had previously been recommended to our clients, increasingly touch-and-go and now for multi-unit properties they are no longer avaliable.
Please be informed that we are neither a Lender nor a Brokerage and do not provide nor guarantee finance; we have monitored this situation to enable us to make recommendations which maximise the success of our clients’ purchases, although we have done so as a goodwill gesture because procurement of finance is the responsibility of the buyer.
Although this may appear to be somewhat disruptive the lowered demand has shifted the market to favour buyers. Furthermore, the exchange rate is still very favourable and as such we have made the following recommendations. These are avaliable on the web link below to assist you with your purchase;
1. Unsecured Finance: effectively you could purchase a property with no money down, there are many lenders whom offer these types of loans and effectively you will become a cash purchaser.
2. Refinance Portfolio: securing capital against investments in the UK, will mean that the funds can be used to effectively purchase with cash.
3. Cash purchase: a cash purchaser can negotiate better prices and will complete a great deal faster than mortgage purchasers, which will appeal to any seller.
4. 50% LTV mortgage: transactions are currently completing using 50% finance, this is the only mortgage product presently avaliable, and the lending criteria is very open making it very easy to obtain finance.
You’ll find that borrowing (certainly in the UK) will actually return favourable interest rates compared to US mortgage products previously avaliable. It is important to also note that the market will not stay like this forever, and there will soon be mortgage products avaliable for you to use as the market recovers.
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