- Purchase price – £2,500,000
- Loan amount – £1,625,000
- Foreign Income
- Complex self employed income
What was the situation?
An owner of a private equity business seeking a mortgage approached Advias to help with the purchase of a new family home for £2,500,000. The requirement was an interest only mortgage of £1,625,000.
Although the client had £1.5m in savings, he wanted to hold back some liquidity as their monthly income is inconsistent. Therefore they required an interest only mortgage to keep payments as low as possible and a 65% loan to value to ensure good liquidity was maintained post completion.
Edward managed to source me a very competitive mortgage despite my income streams being very complex (business owner and foreign income). Extremely responsive and results driven. Knows the market inside and out. Thank you!
What was the issue?
The client’s income stream was complex:
- The income from his private equity business originated from over ten underlying subsidiary businesses in which he held less than 25% of the shares.
- The remaining income originated from a 6% shareholding in a European family company. To make affordability work, we had to ensure that a lender would recognise his allocated profits as income rather than dividends.
- Furthermore, as this offshore income was in Euros (Foreign Currency Mortgage), we also had to deal with how lenders would assess potential currency fluctuations from this income.
The client had already approached a private bank aiming to deliver a five-year fixed rate of circa 2.2% with an arrangement fee of 0.5% of the mortgage amount. Our approach was to work with a high-street lender that had underwriters accustomed to working with complex incomes.
By working with the lender, they recognised all the private equity income and the clients’ share of family business profits, which they only haircut by 10% for currency fluctuations.
We secured the 65% loan to value mortgage with a five-year fixed rate of 1.46%, a flat fee of £1,495, and a free property valuation. This equated to an approximate saving over the initial five-year period of £66,755.