Great Real Estate Reshuffling

According to a survey by Zillow, 1 in 10 Americans has moved in the past 12 months. With the COVID-19 vaccine implementation and the economy and housing market recovering, Zillow predicts that this number could increase to more than 40 percent in 2021; this means that millions of households could enter the housing market in 2021.

What prompted the Great Reshuffling?

A significant cause of the Great Reshuffling is due to the fact that work-from-home became a norm during the pandemic. Homebuyers quickly caught on to the fact that they can live and work in their dream home and location as long as they have an internet connection. Approximately 75% of those surveyed reported moving for positive reasons, such as being closer to their family, friends, or simply living in their desired part of the country.

Many cities, known as "secondary cities" across the country, have seen a massive influx of movers looking to take advantage of bigger homes with lower prices. According to Zillow, there has been an uptick in the number of people moving to the South over the past year.

The rise in people moving to more affordable areas has triggered a wave of first-time buyers. This is especially true in Phoenix, Charlotte, N.C., and Austin. Zillow's data also showed the highest for-sale inventory climb in 4 major real estate areas – Los Angeles, Chicago, San Francisco, and New York.

We see this as an excellent opportunity for real estate investors, as over the past couple of months, the housing markets outside of the urban areas have flourished. "We have created a process specifically for our overseas clients which is easier, faster, and more transparent than international banks." Robert Chadwick, Co-Founder of GMG and America Mortgages.

At GMG, we understand our global clients' needs, and we provide solutions to match their needs. We make investing in U.S. real estate easy. Schedule a call with our mortgage specialists today.

Sources: Housingwire.com & Realtrends

Hong Kong citizen buys apartment near Cambridge for son during University.

The Client

Our client's son was recently accepted to Cambridge for university and wanted to purchase an apartment.

How We Helped

Our client saw our ad online in Chinese and came through our website. Our Cantonese-speaking team talked through the various loan programs available and why using our services would be better than the local international banks. We found our client a 25-year loan at 1.79% + Base Rate!

NationalityResidenceOccupationProperty ValueLoan Amount
Hong Kong CitizenHong Kong Lawyer GBP 950,000GBP 570,000
Loan to valueRateTermProperty Details
60%2 year tracker rate 1.79% + BOEBRUp to 25 yearsApartment, Cambridge, UK
NationalityHong Kong Citizen
ResidenceHong Kong
Occupation Lawyer
Property ValueGBP 950,000
Loan AmountGBP 570,000
Loan to value60%
Rate2 year tracker rate 1.79% + BOEBR
TermUp to 25 years
Property DetailsApartment, Cambridge, UK

Russian businessman buys a bungalow in Sentosa, Singapore.

The Client

The client was referred to us by a friend who was also Russian and owned several condos in Sentosa. Our client wanted to purchase a home with the intention of moving his family over when their son was to start school.

How We Helped

Our team understood that the client was a Foreign National living overseas with no Singapore footprint. The challenge was to find the appropriate lender for his specific situation. His plan to move his family over was a big help in coordinating with the lender. In the end, we found an investor offering 60% LTV with a 1.35% floating rate mortgage.

NationalityResidenceOccupationProperty ValueLoan Amount
Russian NationalMoscow BusinessmanSGD 25,000,000SGD 15,000,000
Loan to valueRateTermProperty Details
60%1.35% pa3 year fixedBungalow, Sentosa
NationalityRussian National
ResidenceMoscow
Occupation Businessman
Property ValueSGD 25,000,000
Loan AmountSGD 15,000,000
Loan to value60%
Rate1.35%
Term3 year fixed
Property DetailsBungalow, Sentosa

Filipino living in Manila buys an apartment in Melbourne.

The Client

Our client saw our webinar and contacted our sales team in Manila.

How We Helped

Living in the Philippines, our client had limited access to finding a mortgage. She contacted GMG from an event we hosted in Manila and reached out to our team based there. She was surprised to hear that "International" mortgages were available, especially in the Phillippines. Our team was able to find our client a 30-year loan at 50% loan to value. The entire process was handled without the client leaving the country.

NationalityResidenceOccupationProperty ValueLoan Amount
PhilippinesPhilippines LawyerAUD 600,000AUD 300,000
Loan to valueRateTermProperty Details
50%4.88% paUp to 30 YearsCoburg North, Melbourne
NationalityPhilippines
ResidencePhilippines
OccupationLawyer
Property ValueAUD 600,000
Loan AmountAUD 300,000
Loan to value50%
Rate4.88% pa
TermUp to 30 Years
Property DetailsCoburg North, Melbourne

U.K. Citizen in London purchases vacation home in Whistler.

The Client

Our client went to university in Canada and had always planned to retire in Whistler.

How We Helped

Our client was referred to us by his real estate agent in Whistler, whom we work closely with for overseas buyers who require a mortgage. Since our team only works with Overseas Expats and Foreign Nationals, we understood our client's requirements and found him the perfect program that matched his requirements.

NationalityResidenceOccupationProperty ValueLoan Amount
U.K CitizenLondon ConsultantCAD 2,400,000CAD 1,440,000
Loan to valueRateTermProperty Details
60%2.25%25 years Whistler, British Columbia
NationalityU.K Citizen
Residence London
Occupation Consultant
Property ValueCAD 2,400,000
Loan AmountCAD 1,440,000
Loan to value60%
Rate2.25%
Term25 years
Property DetailsWhistler, British Columbia

Canadian Expat living in Asia buys condo back home in Toronto.

The Client

Our client found our ad online and saw Case Studies that exactly resonated with him. He struggled to find a mortgage in Hong Kong, even as a high-earning salaried employee.

How We Helped

Our team of Canadian specialists have over 10 years of experience and are based in Hong Kong. Being able to meet our loan officers in person was a major plus for the client.

NationalityResidenceOccupationProperty ValueLoan Amount
Canadian CitizenHong Kong Investment BankerCAD 1,300,000CAD 845,000
Loan to valueRateTermProperty Details
60%1.85%25 years Upper East Village, Toronto
NationalityCanadian Citizen
ResidenceHong Kong
Occupation Investment Banker
Property ValueCAD 1,300,000
Loan AmountCAD 845,000
Loan to value60%
Rate1.85%
Term25 years
Property DetailsUpper East Village, Toronto

Indian National living in Singapore purchases luxury apartment in Mayfair, London.

The Client

Our client splits his time between India, Dubai, London, and Singapore. His children are all studying in boarding school in London.

How we Helped

Our client was reluctant for further leverage with his private banks who required more collateral. He had not thought of using a mortgage broker, but the banker introduced us, and we delivered a solution that met his needs exactly.

NationalityResidenceOccupationProperty ValueLoan Amount
Indian NationalSingapore Investment BankerGBP 5,000,000GBP 2,500,000
Loan to valueRateTermProperty Details
50%2 year tracker rate 1.79% + BOEBRup to 25 yearsLuxury apartment, Mayfair, London
NationalityIndian National
ResidenceSingapore
OccupationInvestment Banker
Property ValueGBP 5,000,000
Loan AmountGBP 2,500,000
Loan to value50%
Rate2 year tracker rate 1.79% + BOEBR
Termup to 25 years
Property DetailsLuxury apartment, Mayfair, London

Hong Kong UHNW businessman purchases luxury apartment in Paris.

The Client

Our client is Hong Kong businessman who travels to Europe several times a year with his family.

How we Helped

Our client wanted to purchase an apartment in the Golden Triangle, a safe area with good food and “shopping for the wife”, as he puts it. He wasn’t expecting to take out a mortgage but after a referral by his private bank, he realized the rate was too good to pass up. The interest-only option was something that really appealed to him.

NationalityResidenceOccupationProperty ValueLoan Amount
Hong KongHong Kong BusinessmanEuro 5,900,000Euro 3,000,000
Loan to valueRateTermProperty Details
50%1.5% (Interest-Only)10 yearsLuxury apartment, Avenue Montagne, Paris
NationalityHong Kong
ResidenceHong Kong
OccupationBusinessman
Property Value Euro 5,900,000
Loan AmountEuro 3,000,000
Loan to value50%
Rate1.5% (Interest-Only)
Term10 years
Property DetailsLuxury apartment, Avenue Montagne, Paris

Rising Rates From Strong Economic Data, But Still Near Record Lows.

Mortgage rates have recently been seeing higher upticks, indicating a steady economic recovery. Last week (from 15 to 21 February), the rates took the biggest leap in more than a year. According to Bankrate data, the 30-year fixed-rate mortgage reached 3.04% on 22 February, which was 2.8% on 10 February.

Mortgage rates are still near record lows, but the continuous growth could trigger some trends that may not be positive for the housing market, especially for the consumers.

The receding curve of COVID-19 infection, recovering economy, unemployment reduction, and the government’s monetary stimulus packages have encouraged the buyers to return to the housing market. Additionally, cheap mortgages and possible inflation predictions have fueled the demand, creating an imbalance in supply and demand.

The interest rates are unlikely to take a U-turn pretty soon, and experts don’t expect skyrocketing figures either. In truth, rates are still relatively low, as the 30-year rate was nearly 5% even a decade ago. Yet, what could be the impacts of the steady rising rates?

Treasury Yields Could Increase Even More

After bottoming at 50 basis points, the 10-year Treasury yield has been growing since August 2020. On February Friday, it was 1.35%, which has a high chance of growing even more and reaching 1.5%. 

However, the yield won’t increase rapidly unless inflation breaks out or the Fed tightens the policy. Even if inflation happens, it is unlikely to go out of control. Any policy change is not on the horizon, too, since James Bullard, the St. Louis Fed President, dismissed this possibility.

Refinancing Applications Drop

The increasing mortgage rate has caused a decrease in refinancing applications, which is understandable because a home loan refinance directly relates to the ups and downs in the weekly mortgage rates.

The good news is that even with a slight downward curve, the refinancing rate is still much higher in the year-to-year index. It fell just 5% from the previous week, but the rating is still 51% higher than the same period in 2020.

The gap is minimal if you consider the total refinancing applications. It decreased just 0.9% from the previous week’s 70.2%.

Buying Trend Will Continue

Interest rates creeping up have curbed the refinancing trend slightly, but rates are still low enough for buyers to apply for a mortgage. According to the data from the National Association of Realtors, the housing market is hot as the year-to-year home buying rate in January 2021 jumped 24%.

The data indicates a booming buying trend all across the country. The demand is much higher than the number of homes in the market. Morgan Stanley Investment Management’s head of global macro strategy, Jim Caron, thinks that the buying trend will take a huge leap in the coming months.

The new stimulus package will grant individuals a $1,400 stimulus check (the previous one was $600), which will give people more buying power. Caron reckons that a considerable portion of that money will go into the housing market.

Sources: Marketplace, CNBC & Financial times