A new client approached me who was seeking to remortgage £6 million pound family home in Hampstead. He was the CEO of an online retail company. It was a freehold house, currently valued at £6 million with an existing mortgage of £825,000.
The situation was not quite this simple though, as my client also had a bridging loan of £2.1 million against the property. He had raised these funds in order to invest into his business which he was restructuring but the debt was unsustainable as it was costing him c. £30,000 per month and increasing.
The fixed rate mortgage against his house was also ending around this time so the circumstances were very timely. My client, therefore, wanted to raise £3 million immediately. The main issue was that my client’s income would not normally support a £3 million loan, although there was an expectation for the business to grow following his recent investment. He also held £500,000 cash savings that we could use as leverage.
Due to these circumstances there were only two potential private banks that would consider this as viable. Private banks are typically the ‘go-to’ lender for this type of scenario as they are more flexible in their lending criteria and will consider tailoring products to meet the needs of clients that are a ‘good fit’ for the specific bank.
I managed to find a solution that worked well for my client with a lender who would allow the client to raise £3 million under the condition that the sum of his cash savings be held as assets under management to forward fund some of the interest payments. The client was also able to bring a share portfolio to the private bank of a further £500,000. He was therefore able to pay off his bridging loan and the whole process completed within 2 months.
My client was extremely happy as we achieved his objectives by providing a completely bespoke solution which took account of his entire circumstances, not simply his salary.