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LIBOR Loan Case Study #170 |
 |
June 9, 2009
Borrower Profile:
- Foreign National, Tech Corp CEO
- Lives and works in USA
- Wishes to purchase without incurring currency exchange fees
- Needs $2 million in purchase money at 55% LTV
- LIBOR loan: 30-year note (or until borrower is 70) based on 1-Year LIBOR
Main Benefit:
- Using Foreign Currency Exchange via LIBOR
Customer is CEO of a tech company in the SF Bay Area. He has considerable foreign assets and “wishes to keep it that way.” He’d also like to save cash on currency exchange.
Generally a foreign national is eligible for a secured residential mortgage loan here in the US. However to do so, the client needs to liquidate foreign currency (foreign in currency and/or location) and bring it here to close their loan. This is inconvenient, can be costly, and necessitates fees and new banking relationships. Many folks who come here to the USA do not want to involve our dear old IRS in their affairs, no matter how slight the perceived potential intrusion.
With this international program, the cash stays at home. The rates of this program are dependent upon the home currency, and are only applicable with non-owner or vacation properties. Most first and second world currencies are eligible for participation. The currency of your mortgage must match either the local currency of the property's location or the currency of your primary income. Here is a list of eligible currencies (don’t forget GOOD OLD GOLD, either!):
- Pounds Sterling
- Euro
- US Dollars
- Australian Dollars
- Canadian Dollars
- New Zealand Dollars
- Hong Kong Dollars
- Singapore Dollars
- Swiss francs
- Japanese yen
The option we brought in for our investor is a 30 year note based on the 1 YR LIBOR. The fully indexed rate is 1YR LIBOR (2.01%) + 2.69% = 4.7%, and a payment of $10,372.76 (if anybody can get a jumbo 30 at this rate, please let me know). We have a live deal here, folks! LIBOR loans can help.
The moral of the story: don't get hung up at the conventional banks. Choose a mortgage planner (or two) that has connections to investment banking and commercial lending institutions that understand the need for special case individuals to manage their wealth building via timely and appropriate mortgage products. This is the power of LIBORATION.
Jack Williams divides his time between family and business in ever-changing proportional balance. In between changing twins' diapers, and reading Ferdinand and Good Night Moon, he is originating and facilitating funding for LIBORATED people. Jack can be contacted in care of gotrates.net.