Cases that contain complex income streams are exactly what they say on the tin: complex. We are frequently approached by global high net worth individuals who have complicated or multiple income streams, as well as assets all over the world. The typical state of play in these circumstances is that whilst the high street banks and mainstream lenders tend to shy away from complex income streams and the issues they present, the private banks and niche lenders step up to the plate. However, interestingly in this client’s situation, this was not the case.
This particular scenario concerned an ultra-high net worth (UHNW) Malaysian national who was looking to purchase a property in London as his children were relocating to be educated in the UK.
The client was an extremely wealthy self-employed owner of one of the world’s largest operators of tender rigs, as well as a global oil-and-gas services company, an aviation and auto parts business, and a large property portfolio. After having been introduced to Enness by a close commercial finance ally within our network, we understood that the client wished to purchase a stunning £6.9 million apartment in the heart of London’s Chelsea. With three bedrooms, a spacious terrace and fantastic transport links nearby, the property was the perfect option to accommodate the client’s children when they moved to the UK to further their education.
The headline client scenario was as follows:-
Client: UHNW individual living in Malaysia looking to purchase in the UK
Income: Complex income streams from multiple global sources
Property Value: £6.9 million
Property Location: Chelsea, London
Property Type: 3-bed luxury apartment with large terrace in prime London residential area
LTV Required: 70%
Mortgage Type: Residential purchase
The client’s lending requirements, however, were made difficult to meet due to his global, vast and complex stream of income, his desire for a high loan to value (LTV) and the fact he wanted the mortgage to be part variable and part fixed. This made his case very difficult to process by many mainstream lenders who simply did not have the capacity to assess the size of his assets and income.
ISSUES TO ADDRESS
As highlighted above, there were multiple elements to this scenario which meant the majority of mainstream lenders would not consider the case. This UHNW client was complex in that he had multiple incomes drawn from a number of different companies along with assets and liabilities all over the world. Enness is an independent mortgage brokerage and therefore we are able to speak to more than 300 UK and international lenders, meaning that whilst we knew main mainstream lenders would struggle to meet the demands of this case, we would be able to call on our trusted global network to find a favourable result for the client who would be able to take a more holistic view of his needs.
To summarise, the key issues in need of address were:-
Income Streams: Complex, vast, global and difficult to process
Loan Amount: High LTV of 70%
Mortgage Requirement: Part fixed, part variable
It soon became clear the only course of action to get the best outcome for the client was to approach an international bank that would take a holistic approach to the client’s situation, with experts who had a strong knowledge of his home region and could take the time to understand the client’s wealth. They were also happy to organise the loan in 2 tranches (fixed and variable) as per the client’s request.
Details of the loans secured-
Funding Partner: Leading international bank
Property Value: £6.9 million
Mortgage Funding: £2.7 million
Mortgage Type: 2 products – Variable and Fixed Rate
- £945,000 loan
- 1.8% over BOEBR
Fixed Rate Product
- £1.79 million loan
LTV ratio: 40% (in total)
Mortgage duration: 5 years (for both products)
We were able to secure two competitive products which would allow the client to have uncapped overpayments on the variable portion of the mortgage, but also the security that interest rates wouldn’t rise on a significant part of the loan with the fixed rate product in place.
Due to our dealings, the client now has a relationship with an international bank who is more suited to their general property needs and global portfolio if they ever look to remortgage, sell, or even buy another property in the UK.
WHAT CAN ENNESS DO FOR YOU?
If you find yourself in a similar situation to the client in this case study we would welcome the opportunity to chat with you. A no-obligation discussion regarding your specific scenario would allow us to offer suggestions, advice, and solutions going forward. As we have access to more than 300 worldwide lenders we are able to secure extremely competitive quotes for clients. This allows us to put together a number of options using real-time rates which allow you to compare and contrast not only short-term cash flow but also short, medium and long-term liabilities. Sculpturing a funding arrangement around your specific scenario can be challenging but ultimately extremely rewarding.