Mortgage to Raise Cash for Buy to Let Purchase for Contractor Earning Japanese Yen

The Scenario

Our client approached us looking to remortgage his main home to raise capital for a new investment property purchase.

He currently owned a £700k family home in Middlesex and had £300k outstanding on the existing mortgage.

He was looking to raise a further £120k by refinancing his home, and then use the funds to purchase a Buy to Let property in the UK that would provide rental income and investment growth.

However, our client was working abroad in Japan as a contractor, and earning in Japanese Yen.

This presented 3 hurdles with his application:

• The client was spending a lot of time in Japan, and wasn’t sure if he’d still be technically classed as a UK resident for his mortgage application
• His earnings in Japanese Yen would be rejected by most mainstream lenders
• And contractor income is harder to borrow against due to it being less secure than an employed salary

The Solution

Thanks to our broker’s market knowledge, we were able to take the application directly to a lender that specialises in contractor remortgages and foreign currency applications.

While it’s unusual even for them to process an application for a contractor who is also earning overseas, through our relationship with their underwriting team we were able to make a strong case for our client.

The good news for our client was that he had:

• 12 months history of earning as a contractor
• Evidence of at least 2 previous back-to-back contracts with no gaps
• And over 6 months remaining on his current fixed term contract

This is often the golden rule for contractor income mortgages, and while there are options that we can explore if you don’t meet these criteria, having these minimum requirements will significantly increase your chances of securing a contractor mortgage.

We also ensured that the lender treated him as a UK Resident for his remortgage application, despite not being a UK resident for tax purposes.

Finally, the lender we used also agreed to raise the finance as a simple cash release, and didn’t require an agreement in place for their new Buy to Let property purchase like most mortgage providers typically would in this scenario.

Our client then had plenty of time to scour the property market and jump at any great investment opportunity he found, and with ‘cash buyer’ status behind him, he was an attractive buyer.