So, one day the phone rings with a prospective client wanting to apply for a mortgage as soon as possible.
Upon meeting our mortgage adviser it is declared by the applicant that he is a foreign national with no UK address history because he has been living in a hotel since arriving in the country 3 week earlier. On top of that he has no permanent employment and wants to put down the lowest possible deposit on a property valued at £450,000.
Whilst this all sounds a little fishy we are used to unusual cases which need careful underwriting and our mortgage broker decided to get to know the client a little better.
As it happens the client in question is a professional footballer who had just agreed to purchase a house near to his new club just outside of London and needed a suitable mortgage to meet his needs.
He did not want the instability of renting a house and liked the idea of having a property within the UK for possible future investment purposes. Whilst he could have purchased the house for cash it was not a good idea to realise his overseas investments and bring money into the UK when Sterling was strong against the Euro.
Our mortgage advisers main areas of concern was that he is a foreign national who had only just moved to the country in the last 3 weeks. He did not have 2 years’ worth of address history which most lenders insist upon having and his current residence was a hotel room. He wanted to put down the lowest deposit possible, insisted upon a competitive rate and wanted a fixed rate mortgage deal with no penalties past expiry. He was also technically a contract worker as his football club only offered a 3 year contract. To make things more difficult, most lenders will not give footballers a mortgage past the age of 35 so mortgage terms offered maybe low.
Good points to consider was that he had a healthy salary which more than covered his mortgage payments on a repayment basis. Whilst he is a foreign national, he was born in Spain which is part of the EU and he has played for clubs in both Spain, Germany and England. He had letters from the football club stating that he had been offered a 3 year contract. Additionally, we googled him and there were millions of results, some from reputable sources giving a full history of his career to date, so we knew he was a genuine guy. We also found out that he had a good level of savings in Spain and also owned other properties.
The main objective was to choose a lender which would not only accept him but also provide the client with what he wanted in terms of cost, security and flexibility.
Before approaching lenders we used our experience to shortlist a number of mortgage lenders who may offer him a mortgage. We then put a strong case together and approached various mainstream lenders who we thought would entertain such a case from someone who was a contract worker wanting a fairly large mortgage with the lowest possible deposit and had no UK address history. It is worth noting that some lenders look at applications on an individual basis and if you are a good risk you may get an agreement in principle from a mortgage lender.
Whilst it all sounded a near impossible task, our experienced mortgage adviser actually got several offers on the table but the main sticking point was term. He could only manage to get a 10 year term which is far short of the usual 25 year terms we are used to seeing. As the lender insisted on a repayment mortgage the lower term significantly increased the monthly payments. This was because footballers tend to retire around the age of 35. Our client was happy with this as mortgage payments were still affordable and he expected to pay off his mortgage early after the 2 year fixed rate had expired. The lender accepted that he did not have 2 years address history within the UK but the fact that he had lived in the UK before went in his favour as did the fact that his career has been with clubs in EU countries.
Whilst we aimed at a 10% deposit, the best offer was from a lender offering a competitive rate but only if a 15% deposit was put down. Our client agreed.
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