High-Value Mortgages for Individuals with Complex Income

High-value mortgages for individuals with complex income

Toby Johncox

I’m asset rich but have low or complex income. I want to buy a high-value property. Can I get a mortgage?

Having significant assets and wealth but low or complex income is very common. Unfortunately, it’s also usual for mainstream lenders to hesitate to lend to you under these circumstances. Most banks will understand your position, but their internal risk and underwriting processes will mean that they will focus on income and affordability. They won’t be able to consider the broader details of your situation, i.e., your wealth, assets, investments etc.

But it’s certainly not game over. As long as you have significant assets (even if they’re illiquid), a high-value mortgage is well within reach, even when you have unusual, unpredictable or low income. Let’s look at different scenarios and your options:

I have some capital I can put towards a property purchase but low/complex income. How can I get a competitive mortgage?

If you have low or complex income, a pre-funded mortgage is one solution. In this scenario, you’ll pay your lender a certain number of years mortgage upfront. The rest of your mortgage is then paid off in the usual way with monthly repayments. 

This system is designed to give the lender comfort, and it reduces their liability. On the other hand, you can still enjoy a competitive mortgage without having to sell assets to fund your property purchase. 

Lenders will still want to ensure that you have enough income for your day-to-day living expenses and outgoings. You’ll need to be able to show lenders that you can comfortably pay your monthly repayments and live off your income.

I have an extensive portfolio of stocks. Can I get a high-value mortgage without liquidating some or all of my portfolio?

You have a couple of options here. 

First up, if you have a large portfolio, Enness can help you monetise it. For example, if you have a portfolio of stocks worth £1m and you want to opt for a 20-year mortgage, the lender could view this as income of £50,000. You would be given a mortgage on that basis. 

The second option is lending against your portfolio, i.e., a Lombard Loan (also known as securities-backed lending). Lenders will let you use your securities as collateral for a loan that you can use to buy a property. It’s worth noting that these days, lenders are far more open to more unusual stocks: pre-IPO stocks, unlisted stocks and single stock loans will all be possible options. 

Securities-backed lending is flexible, and rates are competitive - it can also be much faster to arrange than a traditional mortgage, and you’ll remove some of the restrictive regulations associated with property.

One thing to be aware of: you’ll usually need to put your portfolio under the custody of your lender. You’ll be able to negotiate what the lender can do with your portfolio, but you won’t be able to manage it for the loan period. 

I'm the beneficiary of a trust. Can I get a mortgage?

In short: yes. However, you’ll need to find a lender that understands trusts, and that understands there’s more than just your income at play.

Mainstream banks tend to get tripped up by trusts on the basis that they are ‘unusual.’ Some banks will be able to cater to you, but by and large, borrowing from private banks is usually the most straightforward option if you generate income from a trust.

Just as with more straightforward mortgages, lenders will focus on your ability to repay your loan. If you derive income as the beneficiary of a trust, you can use this to justify affordability.  

The way Enness approaches negotiating a mortgage for you if you are a beneficiary of a trust will depend on:

  • The type of trust
  • The income you derive from the trust as a beneficiary
  • How much is held in the trust
  • The jurisdiction the trust is held in

Private banks and alternative lenders tend to understand trust structures and are more likely to be able to deal with the international aspects required for this type of lending. 

Contact Enness

Enness can help you secure competitive and high-value mortgages, even if you have little income or non-standard income streams. Get in touch to find out how Enness’ expert team of brokers can help you.