Mortgage for non resident

M

Mumha

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A relative of mine has been living in the US for the last 25 years, and has been looking for a property to initially rent out, but move back home to in time. One has come up, and while he could properly cover the entire cost of the house, he's thinking of putting 50% down (about 170k) and getting a loan for the rest, financed by renting it out for the next 5 to 10 years, and then pay the remaining principal off when he returns. The property is in a very rentable area, and should easily pull in 1600+ a month.

My question is, would the banks be interested in loaning money in this situation ?
 
Hi,
The last time I looked into this AIB was the only mainstream bank that would have looked at it. For the other lenders, lending to someone outside the UK or Eurozone would be an exception to policy so require a strong case.

They'll be borrowing at BTL rates, so 4.85%+

They would need effectively a business plan, showing that the rental income will be more than enough to cover mortgage, even in stressed scenarios.
 
If he owns property in the US he might be able to borrow on the strength of that.

Currency could move against him of course, but it might be simpler than a mortgage here.

He should also think about tax which can be complicated if he is a US citizen now.
 
RedOnion said:
Hi,
The last time I looked into this AIB was the only mainstream bank that would have looked at it. For the other lenders, lending to someone outside the UK or Eurozone would be an exception to policy so require a strong case.

They'll be borrowing at BTL rates, so 4.85%+

They would need effectively a business plan, showing that the rental income will be more than enough to cover mortgage, even in stressed scenarios.
Click to expand...

Thanks, I'm waiting on a callback from AIB.
 
NoRegretsCoyote said:
If he owns property in the US he might be able to borrow on the strength of that.

Currency could move against him of course, but it might be simpler than a mortgage here.

He should also think about tax which can be complicated if he is a US citizen now.
Click to expand...

He actually had 3 rental properties in the US, aside from his own house, which he sold over the last 18 months, at a profit. He could buy the house outright, but prefers the idea of part finance, part mortgage from a tax point of view.
 
Leo said:
How does he propose tax savings would outweigh interest charges?
Click to expand...

Maybe I've phrased it badly, but that isn't what i meant. I meant as he would be renting the house out in short & medium term, he could use the rental income to help pay the mortgage, and he would be able to offset maintenance, repairs etc against tax owed. I have a house rented out myself for the last 3 years and had a small loan (now paid off).
 
Mumha said:
I meant as he would be renting the house out in short & medium term, he could use the rental income to help pay the mortgage, and he would be able to offset maintenance, repairs etc against tax owed.
Click to expand...

You don't need to have a mortgage to offset expenses against tax on rental income.
 
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