Enness Recently Assisted A Client With Complex European Property Financing Needs

17th October 2023

Monica Bisci

Biarritz house
Monica Bisci

Monica Bisci

Enness was recently approached by a client looking to finance the purchase of a secondary home in Europe. The client was buying a property that was under construction. They were looking to buy it when it wasn't fully completed and wanted a bank that could assist them during both tranches of the loan (while under construction and while not) without having to liquidate their investments. The client was also looking for a bank to transfer part of their private wealth and recreate a portfolio with the new lender. 

This client also relied on us to help them identify a tax advisor, lawyer and someone to help them set up a company structure, as they wouldn't have bought the asset under their personal name. 

Enness had 3 points to tackle:

  • Find a lender that could finance the property they were buying in Europe
  • Find a bank with proper AUM solutions and a good rating where they could deposit the AUM
  • Identify someone who could assist with tax advice, company set-up, and assist in the process from a legal point of view

Enness identified a lender that could finance the property for the client on a seven-interest-only loan. The client rate started at 1.35% + EURIBOR 3M to benefit from the additional AUM they had brought to the bank, and the rate was set to change in accordance with the amount of AUM they would have kept at the bank. The minimum AUM the client had to leave at the bank was 1,700,000 euros. Although it was the idea of the client to develop the relationship with the bank and increase the AUM over time, we have added a "changing "margin to make sure that if they were to decrease the AUM, they wouldn't have jumped to a much higher rate all at once. While most lenders have five-year interest-only terms, the seven years allowed them to keep the deal longer than standard. The client decided to start with a variable rate but can fix it as soon as they want during the loan term.

As the AUM and banking relationship part was essential for them, too, we have made sure to onboard them with a bank with high renting and a lender from which we had positive feedback from previous clients.

Here at Enness, we know the benefits of buying under a company structure compared to a personal name. While we can't provide tax advice, we ensure the client knows the difference between owning under personal and company structure. Although we can't provide any advice, we work with a network of trusted partners that can offer clients advice ( tax or estate planning) while helping them set up company structures. 

We identified a partner that specialises in international taxation and estate planning that could understand the three different jurisdictions we were facing and provide proper advice. After a first introduction call and a few more calls between advisors and the clients, they decided to set up a double Monaco company to hold assets and AUM – and provide the maximum tax benefit for the client.

The double SCI Monaco structure is quite efficient but sometimes difficult to digest for lenders who have never worked with such a structure. As brokers, we are here to simplify the process between lender and client and ensure the deal is completed on time.

Assisting a client with a mortgage is not only about the mortgage terms but also understanding the client's overall requirements that go beyond the term sheet per se. Enness can accompany you in your project to buy your holiday home, making sure you have the best terms for your situation and that you are buying your home the smart way.

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