Restructuring of complex £1million+ loan for older borrower

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THE SCENARIO

Many lenders will not accept new borrowers over the age of 70, which can pose a problem when a mortgage term comes to an end for an older borrower. I was recently able to help a married couple—72 and 68 years old respectively—who were retired with grown up children.

They had approached me directly following a personal recommendation, and explained the complexity of their issue to me. After their mortgage had come to the end of its term, their current lender—a private bank—was not willing to extend their mortgage. My clients’ savings were predominantly in a stocks and shares portfolio, and they did not want to use these to pay down the mortgage as they were bringing in a good return.

This was not a simple remortgage, however; the clients approached me with a total debt of £1,170,000, split between £930,000 outstanding on his property and another debt of £240,000. I needed to refinance the entire debt amount of £1,170,000 for my client; consolidating this debt was a huge challenge given my client’s age. Additionally, using my client’s property as security for the loan created an extremely high loan to value (LTV).

Both factors are usually a bar to lending; most lenders will not accept borrowers over 70, or will restrict the loan to be finished by age 75. The other issue was affordability, as my clients’ pensions were not enough to support the amount needed, and most lenders won’t accept savings and investment income as a full repayment method.

OUR SOLUTION

Only a private bank would be able to overcome these challenges. The banks who would consider this case would only do so with assets under management, so I worked with one of the world’s largest private banks to build a completely bespoke solution for my client.

I succeeded in restructuring the loan against my client’s property and assets under management, securing my clients a 5-year term at 2% over the base rate. This gave my client the comfort of knowing that the assets under management were in great hands, as well as giving them the loan they needed. This is a prime example of how Enness takes a holistic and bespoke approach to our clients’ financial situations.

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