Large mortgage for head fund managers seeking £2.5m for new countryside residence
The situation?
I was approached to help my clients who were keen to move out of central London in search of greener countryside, but still within commuting distance of the capital.
They had found a property which they felt was perfect for them at £2.5 million, and they required 75% loan to value (LTV) as a mortgage requirement.
As head fund portfolio managers, the clients had a healthy salary but a substantial proportion of their income was generated from their large cash bonuses and future deferred bonus schedule. This meant that they received a deferred bonus which was reinvested into a hedge fund and then paid out in instalments over a scheduled period over 4 years. This income would support the clients in their required leverage and high loan value affordability.
Due to the irregularity of how their bonuses are received, I needed to provide the lender with enough supporting evidence to secure a loan of this size. Positively, the clients also have a generous wealth profile in addition to their income, so this helped to bolster the application.
This application was complex for the lender because future anticipated earnings were put forward rather than base salary. Combined, their salary and projected bonuses reached the required affordability.
In addition to this complexity, we received a decision in principle from a lender who found a previously unknown issue with property structure at valuation and therefore, were not comfortable with lending on it.
The solution?
Heading back to the drawing board, I needed to lean on my partnerships with our relationship managers to explain the situation. I found a solution with the bespoke arm of a high street lender who had previous experience of lending to clients with a similar wealth profile and on properties with similar issues historically but that were prime assets.
The final facility secured was a 75% loan to value large mortgage, based on capital repayment.