What types of loans do you offer?

We currently offer two different programs for Real Estate Investors. They are as follows:

Program #1

Maximum 60% LTV for single or dual currency loans***

Lloan can be in the single currency of the jurisdiction where the property is located or the single currency of the main income of the borrower e.g. client earns British Pounds buying property in US, client can borrow in USD OR GBP. Client may also have both these currency options, if desired, with ability to switch between them.

Program #2

Maximum 55% LTV for multi-currency loans***

If client wishes to stray beyond the currency of the jurisdiction where the property is located and/or his/her main income, such multi-currency loans may be considered with two or more currency options (up to a maximum of four) with currency switching. Such loans will be considered on a case-by-case basis only and will only be granted to “sophisticated investors.”

“Sophisticated investors” are defined as:

Higher earner (min $120,000 Per Annum income or currency equivalent)
Must be able to show liquid assets (such as cash, readily saleable stock, equities, bonds in the major indices for example) to a value greater than 25% of the subject loan amount (must be assessed net of the relevant downpayment) and subject to a minimum of such holdings of $120,000 or currency equivalent.
This will need to be proven together with the reason for the applicant’s request for a multi-currency loan on the loan application.

An example of such justification would be that applicant has income in Euro as an expatriate working in Spain and is purchasing a property in US. Client intends to return to Britain when secondment ends or his/her pension will be GBP and makes up a significant portion of wealth. Client may thus need a GBP option as at some point he/she will be a GBP earner during the life of the loan.  This would fit our criteria and we should be able to help.

If the justification for the request is not acceptable to the Bank and the client is looking for unrelated currencies (i.e. not the currency of the security or income currency), with a view, for example, to making currency/interest rate plays, the client:

Must be of high calibre, demonstrably very wealthy & financially strong and can very comfortably weather any negative consequences arising from any adverse exchange rate movements, without undue concern.
The loan must also be substantial i.e. over $2 million or currency equivalent.

Can I/we use this loan to purchase or refinance property in the same country I/we are a citizen of?

Only if you are a US citizen. Other nationalities can only purchase or refinance residential rental properties located in qualified areas outside of their home country.


Who is eligible to apply for this loan program?

Private investors, 18 and older, with sources of income other than any derived from income producing property.

What are the up front costs to apply for a loan?

No. There is no cost to apply for the loan. Fees incur only after you and the lender agree upon loan terms and a formal offer letter is executed.

What are the loan fees?

Please see "Terms and Conditions" for details.

Can I create a company, like an LLC and buy and sell properties through it?

No, we would consider that a trading company. However if your property is in a holding company or a trust, but is still privately owned we could refinance it. This is because it wasn’t bought by a company or sold by a company it is just protected by a company structure. Please remember that our underwriting guidelines for this loan only allow for private investors not a public trading corporation.

 
I have 50 properties with an income of 10,000 dollars a month in rental property income. And have 9 million in the bank. This is my full time job and thus have no other source of income, can I switch over my 50 properties to this low interest loan?

No, you can't. You would need another income source other than your rental properties. One option is if you have children 18 or over who have a good income, separate from your own, meaning they don’t earn their income from you, they can cosign on your application (only relatives can do this) and maybe you can refinance some of your properties.

 

How do I submit a loan application package?

Applicants can email or fax all required supporting documents to our office. 

 

How long it will take to get approved?

The application process should take 7-10 business days if ALL the supporting documents are in place.

 

What size down payment does the bank require?  How much equity do I/we need in a property for refinancing?

The bank requires a cash down payment of at least 30% for purchases. The maximum loan to value (LTV) ratio is 60% for purchases and refinanced mortgages. 55% LTV when currency switching options are selected.***  The bank will in some cases offer 100% financing.  For further information please contact us.

How much I can borrow?

For loans above GBP 1.0 million or currency equivalent (approx. $2 million), the maximum LTV will normally between 40% and 50%.

 

How is the loan-to-value ratio calculated?

The loan-to-value ratio is calculated by dividing the amount to be borrowed by the value of the property (sales price or appraised value, whichever is less).

What is the interest rate?

Currently, the interest rates for Program #1 are around 4.9% and the rates for Program #2 are around 4.4%.  Please note that these rates are variable, and will change on a quarterly basis.

Are interest rate caps available?

No. The loan carries an adjustable interest rate with no cap.

What is the loan term?

Up to 30 years or up to 70 years of age, whenever is earlier. For example, if your age is over 40, and you would like to have 30-year term, then you might need a younger co-signer.

 

Can I get interest only payment for up to 30 years?

Yes. Absolutely! This is the longest interest only payment in US, plus there is no additional finance charge for this option. No US banks offer an interest only payment up to 30 years.
You don't need to pay principle until the end of your loan term. However in this case, a lower LTV may apply.

 

Is there a prepayment penalty?

No, there is no prepayment penalty.

 

How do I make repayment?

Repayment is quarterly in arrears.

Besides interest rate fluctuation, is there additional risk involved with your Program #2 loans?

Yes. The loan is drawn in a selected international currency and converted to USD at the current spot exchange rate. The loan is then paid down at future dates using future currency conversion rates. If the dollar depreciates against the selected currency, potential losses may be accrued.

 
Is there any way to predict currency rate fluctuation?


No. There are no proven methods of predicting currency movements. However, you may elect to call the bank and lock-in your mortgage payment on any given day during a quarter (3 month period) to take advantage of favorable currency market conditions. This not only limits the risk of currency fluctuation, but possibly can turn fluctuations into additional profit.

Are there ways to hedge against the currency risk of a foreign currency mortgage?

The currency switching options, quarterly lock-in rate, and no prepayment penalty clause built into this loan program can all help borrowers to minimize the risk of adverse currency movements. Other potentially cost-effective hedging options should be discussed with your financial advisor.

Are there any balloon payments?

No. There are no lump sum payments due after 3, 5, or 10 years. Borrowers that select the interest only option will be expected to pay back the entire loan amount at the end of the 30 year term.

 

Do I need to pay property insurance?

Yes, all borrowers will be required to pay property insurance.

Is closing / escrow handled locally?

Yes. The lender will instruct all the details after application has been approved. You can choose any escrow company you would like to work with. Also you can choose the lawyer, the lawyer will work closely with you escrow company for a smooth transaction.

Will liens and title be properly recorded in the local county's recording office?

Yes. The escrow company will do the recording in the county that the property is located, just like every real estate transaction we're doing here.

 

Will owner occupied property be considered?

No. Owner occupied properties do not qualify under this program. This loan is for residential rental property only. Including single family, duplex, triplex, 4plex, and condo. 

Can I use this loan to do new construction or remodeling?

No. For purchasing or refinancing only.
 

Will the lender take second position as lien holder?

No. The lender will expect to be the primary and main lender and lien holder on any property it invests in. They expect first right to the property if the borrower stops making payments.

 

Does the lender allow other currency payment option? 

Yes. When multi-currency option is offered, 2 free switches per calendar year will be available. Additional switch requests will be charged $150 per switch.

 

In which states are these loan programs available? 

This loans' availability in the US is limited to the following areas: Hawaii, California, Nevada, Colorado, Connecticut, New York, Florida, Oregon, and Washington

How much margin will the bank charge?

The bank will charge a margin of 2.39% for the property in US. This margin is the bank’s profit. In addition to this margin is the Cost of Funds.  The Cost of Funds is based upon which currency you're borrowing. If you borrow Hong Kong Dollars, for example, the Cost of Funds is currently 2.0%.  The Cost of Funds combined with the bank’s margin will determine your interest rate.  A Hong Kong Dollar  mortgage therefore carries an interest rate of about 4.4% including the bank's margin.

 

If it is so good, why we didn't have it before?

This program has only been available since January 1st, 2007.

 

Interest rates, mortgage program terms and conditions are subject to change without notice. Loans are subject to review and approval. Please refer to the Disclaimer for further information on our disclaimer policies. ***Max LTV for properties located in CA, FL, NV, and OR is 50%.  Minimum down payment is 50%.  5%. lower for the Multi-currency program.