Scenario:
The clients existing fixed rate was expiring and they wanted to seek a more competitive rate. The property had an estimated value of £5 million.
The client was a HNWI with a large property portfolio in the background. Whilst they had additional assets, they were looking for a dry lend whereby no assets under management were required.
Challenges:
Like many HNWIs, the client had a complex income structure. In addition to rental income from their property portfolio, the client owned a number of successful businesses, some which they received dividends from and some that had retained profits.
The loan amount required was far in excess of the standard 5 times income multiple retail lenders offer so a lender familiar with HNW finances.
Solution:
As the client met the HNW definition, we sourced a private bank able to factor in the clients entire financial situation. Unlike traditional lenders, the bank did not use income multiple calculations but simply assessed whether the debt was affordable.
In this case, the client was able to demonstrate based on their assets and various income streams that they could afford the monthly loan repayments. The bank did not require any assets under management although they did provide the bank with additional comfort.
Key figures:
Property value: £5 million
Loan amount: £2.4 million
LTV: 50%
Repayment type: Interest only
Product type: Fixed rate
Interest rate: 2.4%