Are you asset rich but income poor? A client approached us with insufficient personal income to support the mortgage they required. Still, we were able to source a lender who could base their affordability assessment on their investment portfolio.
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Case Profile
A couple of first-time buyers were looking to purchase a £2m property in North London, which they intend to make into their family home. They were competing against another bidder and were under pressure to secure a mortgage loan as soon as possible.
The primary earner receives a non-traditional income working for a tech-based company. His income was awarded as stocks and shares. The client had an assortment of private equity funds, shares, and inheritance money totalling over £3m. Aside from our client’s complex financial structure, this case was tricky because they required a large loan of over £1.5m on a full interest-only basis. They also needed a significant loan-to-value of 75% of the property value because the client’s assets were tied up in investments that could not be broken.
We needed to source the money through a private bank that felt comfortable working outside of affordability parameters that traditional banks typically set.
Solution
We approached an elite private bank with whom we shared a long-standing relationship to enable us to leverage the client’s background assets. Initially, the maximum amount the bank would lend the borrower was 70%. Still, after some negotiating, we arranged an extra 5% by using bespoke terms, whereby the client’s portfolio of assets was held with the bank. The additional 5% would reduced back to 70% LTV over 24 months on an amortised basis, which means that the client will pay off the debt with regular payments.
We secured a market-leading rate over a five-year term, which we timed to fall in line with a large share allocation that the client will receive from his company then.
We were able to get the finance arranged quickly, therefore, our client managed to beat the other bidder to the post. Our client is thrilled to have secured an excellent deal and looks forward to enjoying their new family home.
