What was the situation?
I was approached by an UHNW client whose private bank and lender were looking to move their existing residential facility from interest only to a full capital repayment basis in view of their age. Further to this, they were looking to raise £2,000,000 to help their son for inheritance tax planning. The move to capital repayment would have vastly increased the monthly payments beyond what the client was willing to pay. At 73 and semi-retired, they were looking to remain in their home for a further 5 years before downsizing and repaying the loan in full when they were ready.
The client was looking for a loan of £8.25m against their prime central London residence valued at £18m. I was tasked with refinancing the facility to a lender who understood the clients’ requirements while securing a competitive rate.
What was the issue?
As the client had semi-retired, their children had taken control of the business and were now majority shareholders along with various trust structures. My clients’ day-to-day expenditure was minimal and their drawings from the business matched this to avoid unnecessary tax liability. This meant we required a lender who could consider their entitlement to the vast company profits to support the mortgage despite their limited personal shareholding.
The client’s age was also a major obstacle with many lenders, including the private banks, who typically support interest only borrowing to a maximum age of 70.
What was the process?
I reviewed the family’s entire group of companies with the accountants to establish their entitlement to profits and future growth plans along with wealth and assets held in various trusts. This enabled us to approach lenders with a ready-made proposition as to their affordability for the facility. I worked with a select few private banks and their credit committees to create the ideal facility that suited the clients’ current and future goals.
What was the solution?
By leaning on my strong private banking relationships, I was able to secure a 2yr fixed interest-only facility for the full loan amount, with significantly reduced payments compared to what the client was offered elsewhere, while raising significant funds for their son.
Lending solutions with LDN Finance
Are you looking to purchase a new property but have a complex income structure? We’re here to help you find a solution – no matter how complex your circumstances. At LDN Finance, our specialist brokers have extensive experience in providing creative solutions to secure large loans for our clients.
We work closely with our trusted network of private banks and both high street and specialist lenders to arrange bespoke mortgage arrangements to suit your circumstances at competitive, market-leading rates.
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