International mortgage market solutions to foreign property buyers by Global Mortgage Group

Between April 2021 to March this year, foreign buyers bought approximately $59 billion ($83 billion) worth of houses in the US in accordance with an assessment from the National Association of Realtors. The report also shows that nearly fifty percent (44%) of foreign buyers made their purchases entirely in cash. The percentage is even greater when foreign buyers are not residents of the US. In this group, around 60% are paid cash instead of having the mortgage.

Lentor Hills Residences developer with a joint venture between GuocoLand, Leong Holdings and TID at S$585.6 million, equivalent to S$1 060 per square foot per plot ratio (psf ppr).

In the eyes of Donald Klip and Robert Chadwick who co-founded the Singapore-based Global Mortgage Group, this is a huge market that has not been explored. “Anywhere around the globe there are more than 90% of house purchases are made using the help of a mortgage. But this isn’t the case when foreigners purchase US property,” Klip states.

This is due to the fact that it’s hard for those who do not reside inside the US to get mortgages due to the strict bank regulations according to the co-founders. “A majority of people will not be able to qualify due to not having an US credit score or banks don’t recognise the income earned abroad,” Chadwick explains.

Loan plans with tailored loan terms
To achieve this, Global Mortgage aims to provide a solution — Global Mortgage, through its 100%-owned US affiliate, America Mortgages, provides investors outside the US to apply for an US mortgage to help finance purchasing American property.

America Mortgages acts as a intermediary between its customers as well as wholesale lending institutions in the US and assists in the creation of programs for loans that are geared towards non-US residents, which includes US expatriates as well as foreign nationals.

Through their services that are offered to foreign clients, they are able to get the equivalent of 75% of the financing needed for the purchase of a property within the US with a streamlined application procedure. “We only require a formal note from the employer, or their accountant (if they’re self-employed] that outlines the most recent two years of their earnings, from the current year’s end the date of application,” says Chadwick, who is America Mortgages’ CEO.

Starting at US$150,000, loans are available and the term options begin at five years and extending all the way into 30 year. Mortgage rates are within between the 7 and 7% of a 30 year Fixed rate loan, no matter amount of time the borrower has been in states Chadwick. He says that customers typically can get a mortgage in 30 or 45 days. He also says the process is carried out completely remotely, with no customer needing to travel into the US.

Outside of the US, Global Mortgage also provides mortgage options to foreign buyers looking to purchase properties in other regions of the world, like Canada, the UK, Canada and Australia. But, US loans make up the majority of mortgages it offers.

Expansion of business
Global Mortgage was founded not long after Klip and Chadwick -two American citizens who had moved to Singapore to Singapore in the year 2017. Chadwick is a professional with an experience with US mortgage lending as well as Klip who was a director of a hedge fund, shortly recognized the opportunity to establish the first US mortgage broker in Asia that caters to foreign-owned borrowers.

The venture was started with a passion however, it gained popularity. In the year 2019, the duo obtained seed capital from Korean startup accelerator Sparklabs along with other investors. The business has expanded its operations by opening offices in cities like Hong Kong, Shanghai and Seoul. The company currently employs around 45 employees across the globe.

Global Mortgage has also expanded its range of products. Beyond its primary offering in international mortgages, the company now also offers bridging loans , which are targeted at high-net worth investors and accredited individuals. “This is an important initiative which we’re planning to launch with Singapore,” says Klip.

He says that the service allows customers to access liquid funds quickly to finance real property transactions. “For instance, if a person requires a down payment on the property in anticipation of an increase in price prior to selling their current home it’s an excellent instrument,” he adds. The loans are available in an initial amount of $1 million, and are between 12 to 36 months. The interest rates for these loans usually start at 7% and are typically completed in three days according to Chadwick.