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

Indian National 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

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

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

Why The Coronavirus Has Shifted How We Rent Or Buy Our Home

Why The Coronavirus Has Shifted How We Rent Or Buy Our Home

We are all using more technology: Seesaw, Zoom, Hangouts, Slack, Teams, more Amazon, more Netflix, more online classes, etc. We had to learn to support our children during online classes and create areas in our home for conference calls. 

What is interesting about this is that we have seen a very significant shift in how people think about their living space. The old model was “Office was for Work” and “Home was for Family.” This is clearly not the case anymore, and the lines between where we work are no longer visible – even the more senior professionals work at Starbucks, WeWork, and now finally at home.

We have seen a clear shift up in consumption patterns for renters and buyers. In Singapore, where we are based, it’s very difficult to find larger units to rent for professional families. Google, Microsoft, Morgan Stanley, JPMorgan, Capital One, Zillow, Slack, Amazon, PayPal, Salesforce, and other significant companies require staff to work from home.

The requirements are more bedrooms, bigger spaces, quiet areas, etc. Another interesting outcome is that since families are spending more time at home (not traveling), they can invest more, rent or buy larger homes, better vacation homes, etc.

This is being echoed at GMG, where our mortgage demand sees very clear patterns of increased demand and pricing:

Aspen, ColoradoTotal sales were $3bn in 2020.
There are only 7,400 living in Aspen!
Tampa, FloridaAverage home value $270,000 +11% you
Big Sky, MontanaAverage home value $1.81mn +3%
Austin, TexasAverage home value $437,000 +13% you
Austin is definitely the hottest city we are seeing in the U.S. for mortgage demand!

Over the past 12 months, we have funded: 5 loans in Aspen, 1 loan in Montana, 23 loans in Florida, and 9 in Austin alone!

Let our team of U.S. mortgage specialists discuss how you can secure a mortgage while living overseas, without any U.S. income, U.S. credit. We only work with Overseas Expat and Foreign Nationals, so we know precisely the solutions required to meet your mortgage needs.

Who we are

Global Mortgage Group, through its wholly-owned subsidiary, America Mortgages Inc. is a mortgage broker focusing only on U.S. Expats and Foreign Nationals living overseas. We offer over 150 U.S. bank and lender programs direct to our international clients.

Global Mortgage Group Pte. Ltd. is a leading international mortgage specialist. Based in Singapore with offices and partnerships across the globe, we connect our international clients to our network of lenders around the world. GMG offers financing solutions in the U.S., U.K., France, Canada, Australia, Thailand, Hong Kong, and Singapore.

Fannie Mae Bullish About The Housing Market

Fannie Mae Bullish About The Housing Market

After the nightmarish 2020 year, the country’s overall economy is slowly recovering, and the housing market seems to be at the forefront of that recovery. After the uptick in mortgage applications and continued lower interest rates, the beginning of 2021 has brought more positive trends, including a small leap in the Home Purchase Sentiment Index (HPSI).

Fannie Mae’s composite index showed 77.7 points in the HPSI for January; a clear 3.7 points rise from December 2020. Of course, it’s nothing close to the pre-pandemic indicators since the HPSI still needed 15.3 points to catch up year over year rating.

What does this upward trend mean for buyers, sellers, and the overall housing market? Will this positive sign remain constant for the rest of the year?

A Breakdown of the Market Sentiment

According to the Fannie Mae index, a 16% surge in the section of "Selling Conditions" means that a significant number of buyers consider the current month a good time to sell. This newfound confidence is matched with a 5% rise in household income and 2% more consumers reckoning it to be a good time to buy.  

Fannie Mae’s Chief Economist, Doug Duncan, stated that the lower-income and renter groups played the catalyst in reversing December’s decline last year. It could mean that these groups are the direct beneficiaries of the household income surge and have put their trust in recent government stimulus packages and fiscal policies.

Similar trends are supported by CoreLogic’s recent monthly report of Loan Performance Insights for November 2020. It shows the highest drop in mortgage delinquencies since the beginning of the COVID-19 pandemic. At the end of November, only 6% of all mortgages were in delinquency, and the rate had been declining since August last year. This downturn will directly influence the number of distressed sales, which is suitable for the market.

The CoreLogic report also shows a sharp decline in the unemployment rate, which was 14.8% in April but dropped to 6.7% at the end of the year. Both these factors indicate financial growth and stability for millions of families.

Some government-funded initiatives also have helped in changing the dynamics. Struggling mortgagors were able to take advantage of some programs that allowed them to delay the monthly installments in three-month increments. Along with the decreasing unemployment rate, many homeowners have found their footing and started making payments again.

All of these trends are positive for the housing market. Both the Fannie Mae index and CoreLogic report portray a condition favorable for both sellers and buyers. Stable household incomes and low mortgage rates have encouraged buyers to make a move in the market. Similarly, high home prices, low housing inventory, and people’s growing interest in buying have worked in favor of the sellers. 

Many undecided consumers are waiting for the success of the coronavirus vaccination program and the new fiscal policies. However, the current trends foretell a recovering economy and a healthy housing market.

Sources: fanniemae.com & corelogic.com

U.S. portfolio manager in London refinances his Chicago condo to lower his payments

U.S. portfolio manager in London refinances his Chicago condo to lower his payments

The Client

Our client was referred to us by a friend of Global Mortgage Group. He’s been living in London for five years and has slowly accumulated a rental portfolio in the U.S. His thesis is that college towns offer the best rental yield opportunities. Our client did his MBA at the University of Chicago, so he was very familiar with the landscape.

How We Helped

Finding mortgage options as a U.S. citizen living overseas can be challenging, especially if you have been away from home for an extended period. The good thing about our client is that he still maintained an almost-perfect credit score of 810 and was a very high (and stable) earner - exactly what a bank wants to lend to!

Loan Details

NationalityProperty ValueLoan AmountLTVRate
U.S. Citizen $750,000 $600,000 80% 3.35%
Term StateProperty TypePurposeLoan Type
30 year fixedChicago, IllinoisCondoRefinanceResidential
NationalityU.S. Citizen
Property Value $750,000
Loan Amount$600,000
LTV80%
Rate3.35%
Term30 year fixed
StateChicago, Illinois
Property TypeCondo
PurposeRefinance
Loan TypeResidential

What is the ‘Term’ in a mortgage?

What is the ‘Term’ in a mortgage?

A mortgage term indicates the total duration of a mortgage. You will pay the lender monthly installments during this period and finally own the home after clearing off the last installment. The term of a mortgage starts from drawing the funds from the lender institution and ends on the expiry date when you need to repay the lender.

Global Mortgage Group offer loan terms as long as 30 years (for fixed-rate mortgages) and as short as 5 years (for adjustable-rate mortgages). There are even shorter terms available, known as Bridge loans. These special loans can be as short as six months to up to one year and are excellent for procuring immediate cash flow.

Most financial institutions offer these loans to commercial bodies like investors and constructors, but GMG serves individual clients and the guarantee of some form of collateral.

If you can afford the higher monthly installments, a short-term mortgage saves plenty of money down the road. The explanation is quite simple: the longer the mortgage term, the more is the sum of the payable interest. As the interest rate is primarily front-loaded, the interest amount of a 30-year mortgage would be higher than that of a 10-year loan during the early years.

Similarly, ARM is more financially beneficial than fixed-rate loans if you can pay off the loan during the first interest cap. However, fixed-rate loans are better for people with a limited income. So, you should choose a mortgage term carefully, considering your future plans and current income sources.

The ‘Debt-To-Income (DTI) Ratio’ determines your qualifying ability

The 'Debt-To-Income (DTI) Ratio' determines your qualifying ability

The debt-to-income (DTI) ratio equals your total fixed monthly debts divided by your total monthly gross income.

DTI is essential for mortgage lenders to determine the applicant's financial capacity of paying off the borrowed money in time. Several studies suggest that borrowers with a high DTI ratio are likely to struggle more in making the monthly installments. In this case, the breakeven point is 43, which means this is the highest ratio that a lender will still approve for a mortgage. However, some lenders may consider up to 50% DTI too.

All mortgage lenders check the front-end and back-end ratios to determine the DTI. The front-end ratio covers the house-related debts, including home loans, homeowners' insurance, property taxes, and other expenses. On the other hand, the back-end ratio mostly includes the bills and debts on your credit cards.

The ideal front-end and back-end ratios should be lower than 28% and 36%, respectively. However, a loan approval does not solely depend on this ratio. Mortgage lenders will also take your credit score, percentage of down payment, assets, and a few other things into consideration. If these figures turn out well, you can get a loan with a slightly higher DTI.

Regular household expenses will not be considered as debts. Some other big expenses that will be exempted are healthcare costs, child support, and insurance premiums.

How to Obtain Mortgages Without Income Proof!

How to Obtain Mortgages Without Income Proof!

How to Obtain Mortgages Without Income Proof!

In this Video, Our US Loan Specialist talks about the Current U.S. Mortgage Market & How to Obtain U.S. Mortgages without Income Proof. If you are self-employed or an entrepreneur, you can now purchase or refinance U.S. properties without Proof of Income with GMG.
Find out more in this Video!