Applying for a ‘High Net Worth Exemption’ for residential finance means that borrowers can benefit from working with lenders outside the typical parameters. For high net wealth individuals with no demonstrable income, the exemption can allow them to achieve residential mortgages that would not otherwise be possible. This provision from the Financial Conduct Authority enables any individual with a net annual income of £300k or more, and/or net assets of at least £3M, access to the High Net Worth Exemption.
In these instances, it is imperative to work with a mortgage adviser who understands the complexities surrounding financial regulations and has a strong network of relationships with private banks that can cater to specialist requirements.
Case profile
Our client was relocating from overseas to a £2.5M property in Worcestershire. After having their offer accepted, an investment firm approached us to help their client secure a mortgage loan of £1.2M (48% loan-to-value ). With a narrow window of three weeks to exchange on the property, we needed to find a suitable lender immediately. Although our client had already sold their existing property abroad, they would not exit the property for three months.
Our client’s wealth was locked up in overseas investments, and a significant proportion was from an investment portfolio that was gradually being moved to the UK. As such, the client could not demonstrate that their income was sufficient to cover the mortgage payments in full. We also needed to find a private bank that was happy to work with assets and income in foreign currency.
Some of the challenges that made our client’s case particularly interesting included:
- The client’s primary source of income is through an investment portfolio located overseas
- A narrow timeline of 3-4 weeks to exchange
- Foreign currency income
Solution
Senior Mortgage Associate Aimee Hadley established that our client qualified for the HNW exemption due to her net investment position and the equity in the current property. Aimee sourced a lender willing to offer a bespoke arrangement where they not only lent the funds required to buy the new home, but also the money to fund the mortgage payments for the first 2 years. This was placed in an account with the lender and drawn down monthly to make the mortgage payments, so our client pre-paid the interest.
Are you a high-net-worth individual struggling to secure a mortgage? largemortgageloans.com are specialists in finding creative solutions for high-net-worth individuals. We provide multifaceted solutions and can structure finance in ways that work hard to suit your personal circumstances.
