Scenario:
In this case, the client had an unencumbered stock portfolio worth £10 million. They were in the process of buying a new home for £2m and required 100% funding.
Challenges:
The client faced a common problem many HNW clients have, being asset rich and cash poor. Due to funds being tied up in investments, the borrower had no disposable cash and no guaranteed income and therefore needed to borrow 100% of the purchase price. This is an issue for mainstream lenders who, at this level, cannot lend more than 90% of the property value. Many also struggle to use an investment portfolio as a source of income.
Solution:
We secured a £2m lombard facility against the stocks portfolio as collateral meaning the client could purchase the property outright with funds raised. Whether you are looking to raise funds to buy a new property, reinvest in stocks or raise funds for other investments, lombard finance can be an excellent way to access tied up funds. Magni Finance have access to several private banks who regularly assist our clients with asset backed finance needs.
Key figures:
Property value: £2 million
Loan amount: £2 milion
LTV: 100%
Repayment type: Interest only
Product type: Tracker rate
Interest rate: 1.25% above base