Raising Finance Against A Main Residence In The USA

• Client: USA National and Resident
• Property: Primary residence in the USA valued at $4 million
• Loan: $1.5 million
• LTV: 37.5%

Enness was approached by a US national and resident who had spent several months trying to find a suitable lender to raise capital against their primary residence in the United States. The client wanted to refinance their existing mortgage while releasing additional capital, with the funds intended to support the purchase of a new home without having to sell their existing residence first.

The client had retired within the previous two years, meaning their tax returns showed little to no income. Although they had substantial property wealth, the lack of traditional income presented a significant challenge when seeking finance against their primary residence.

The fact that both the client and the property were based in the USA added another layer of complexity. The client wanted to structure the transaction as a regulated deal, where demonstrating sufficient income can be an important part of the lender's assessment. However, the client's recent retirement meant that their tax returns did not accurately reflect the wider strength of their financial position.

Rather than assessing the client solely on their recent reported income, Enness considered their broader financial circumstances and identified a lender within its network that could take a more appropriate approach to the application. The client's substantial equity in the property provided a strong foundation for the proposed financing, with the $4 million residence supporting a $1.5 million loan.

Working quickly and coordinating across multiple time zones, Enness sourced and negotiated competitive terms that enabled the client to raise the capital required. The resulting 37.5% LTV provided a relatively low level of leverage against the property while giving the client access to the liquidity needed to proceed with their onward purchase.

The refinancing and capital raise allowed the client to purchase their new home without having to rely on the sale of their existing primary residence completing first. This provided greater flexibility around the timing of the move and allowed the client to proceed with their plans while retaining their existing property until a suitable time to sell.

This case demonstrates the importance of looking beyond recent income when assessing complex mortgage requirements. For clients who have recently retired or whose tax returns do not fully reflect their overall financial position, specialist lender selection and careful presentation of the wider circumstances can be particularly important.

Enness works with clients across multiple jurisdictions and has an extensive network of specialist lenders, allowing us to explore financing solutions for borrowers with complex income, wealth and residency profiles. If you are looking to refinance a US property or release equity to support an onward purchase, speak to a mortgage specialist.

Risk Warning:
Mortgages are secured against property and the property may be repossessed if repayments are not maintained. Borrowers should ensure that the proposed borrowing remains affordable, particularly where income has reduced following retirement. Property values can also fluctuate, which may affect the level of equity available.

Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax advice. Finance is subject to status, underwriting, property assessment and lender criteria. Terms and availability will vary depending on individual circumstances and the proposed transaction.