Enness was approached by an internationally based borrower seeking to refinance a property in France. The residence was valued at approximately €2 million, with around €1 million of existing borrowing secured against it.
The existing facility was approaching the end of its term and was due to move from interest-only to capital repayment. This would have increased the borrower’s monthly commitments, so they wanted to explore an alternative arrangement. Their preferred option was to retain an interest-only structure, with the eventual sale of the property forming part of the proposed repayment strategy.
The borrowing had originally been arranged more than a decade earlier, when lending criteria and private banking requirements were different. The borrower was also based outside Europe, adding another consideration when identifying suitable funding options. A key part of the refinancing process was therefore assessing how different levels of Assets Under Management (AUM) could affect the available structures.
OUR SOLUTION
Enness reviewed several potential approaches, including a capital repayment mortgage without an AUM requirement and an alternative structure incorporating assets under management.
The latter option provided greater flexibility around the repayment structure, with the lender able to consider a significant proportion of the borrowing on an interest-only basis. The alternatives were presented alongside their respective requirements, allowing the borrower to assess the different approaches based on their wider financial objectives.
This case demonstrates the importance of considering multiple financing structures when refinancing international property. Where lending requirements have changed since an original facility was arranged, reviewing the available options with specialist lenders can help identify a structure that better reflects the borrower’s current circumstances.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, affordability, property suitability and lender criteria. Terms, rates, LTVs and availability may vary depending on individual circumstances.
Risk Warning:
Your property may be repossessed if you do not keep up repayments on your mortgage or other borrowing secured against it. Property values can fall as well as rise.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
