International mortgages have become easier to obtain for global investors than it is for leading bankers to remortgage their residences.
New revelations about the finances of leading banking figures, and new international investment property mortgage programs are causing quite a stir. These new trends indicate substantially improved investment performance ahead for those poised to capitalize on leading property markets.
So what is at the core of the controversy? What international mortgage loan options are available to investors? What are some of the key terms to watch out for when accepting new capital?
Global Property Investors Poised for Windfall Returns
Despite ongoing debates over the direction of mortgage rates, taxes, and more time required to dispose of distressed property and mortgage debt in some regions, forecasts for both yields and values in prime markets continue to improve.
An October 9th report from Oxford Economics predicts London property values to rise another 33% by 2019. This will be outpaced by the south east at 37%. Information leaked by Miami property insider Kaya Wittenburg reveals top Florida real estate destinations could see values up by 35% in the next months, while rents have climbed by over 50% in some neighborhoods.
All cash transactions may have been declining lately according to the US National Association of Realtors, but this could be more to do with increased availability of international mortgages for global property investors. Still, between 30% and 80% of real estate transactions in strong markets are all cash, building in new strength to act as a shield from future fluctuations.
With increased access to international mortgages at attractive rates investors are able to quickly scale in seizing on current opportunities to lock in great equity positions, with rising yields, to compound both annual, and lifetime investment returns.
Mortgage Capital Preferring International Property Investors
It’s no secret that consumer credit has been tighter in recent years. Highlighting just how bizarre this has become for individuals seeking mortgages are the stories of the heads of both UK and US banking systems.
In 2014, Mark Carney was wooed to becoming the Governor of the Bank of England with a $400,000 per year housing allowance potentially suggesting he may have had an issue getting a home loan. In a jaw dropping moment at a recent conference Ben Bernanke who was chairman of the US Fed until just a few months ago revealed he recently tried to obtain a refinance on his own home, and was denied.
Ironically the largest hedge funds and private equity firms have recently launched multiple conduits which are aggressively competing with each other to make loans to residential and multifamily property investors acquiring income properties. These deep pocketed funds have billions to put to work, are bullish on property appreciation, and love the security of income producing collateral. Front end portals are pulling out all the stops to offer unlimited capital even via mortgages for foreign nationals.
5 Things to Look for When Applying for International Mortgages
- Compare international mortgage rates between lenders
- Know exactly what indexes future mortgage interest rate adjustments are tied to, and how
- Compare both resource and non-recourse mortgages for limiting liability
- Be sure to understand the math of any loan pre-payment penalties
- Be alert to third party products required by lenders, for example; windstorm insurance in Miami or life insurance in the UK