A US national client approached Enness with the objective of downsizing their property portfolio to optimise their assets and increase financial flexibility. Despite having limited traditional income, the client had substantial personal wealth, mostly held in investments.
To meet the client's preference for an 85% LTV, our primary objective was to secure a loan for the property purchase. We negotiated the terms of an Interest-Only payment structure at 1.09% + Bank of England Base Rate (BBR). Given the client's unique financial situation, we had to establish a repayment strategy that leveraged the investments as collateral and demonstrated serviceability.
We faced two main challenges. Firstly, the client's income was not conventional, which made it difficult to meet the standard serviceability criteria for mortgage approval. Secondly, crafting a repayment strategy that relied on investments required careful consideration and validation to meet lender requirements.
We strategically leveraged the client's significant portfolio as the primary repayment strategy, thoroughly assessing the value and stability of these investments. This demonstrated to lenders that the holdings could effectively cover the repayment obligations. We also successfully negotiated competitive terms of an Interest-Only payment structure with minimal fees. This provided the client with a financial arrangement that suited their goals. This bespoke solution allowed for manageable payments while preserving the client's capital.
This case study highlights how a tailored and strategic approach to financing can address the challenges posed by unconventional income sources. By leveraging the client's substantial investments, we not only secured the necessary funding for the property purchase but also demonstrated the client's ability to service the loan effectively.
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