Residential refinancing to raise capital for a client with a complex income structure

THE SCENARIO

At Enness we receive a great deal of clients who have complicated income structures and it seems that the higher the net worth of a client the more complex a case tends to become. Clients come to Enness because of our well-known ability to resolve these difficulties.

Recently a property developer client came to me following an online search. He was looking to refinance his residential property in order to raise capital for the deposit of a land purchase where he was going to build a new residential property for his family. However, his primary residence had an existing mortgage of £1.25million which was the first challenge.

My client’s residential mortgage was also due to expire and his bank had declined to refinance and extending the mortgage despite having previously assured him that his application would go through.

He also had a small amount of adverse credit on one of his buy-to-let properties. As well as this, as a property developer, he had an irregular and fluctuating income and was only able to prove his latest income as his company’s previous year’s profits. Clearly, this case was going to be a challenge.

THE SOLUTION

Finding a lender that would be able to help him refinance based on affordability alone was going to be next to impossible. I recognised that I would have to find a bank who would lend my client the maximum possible for a first charge mortgage, taking into account his complex income structure and slight adverse credit. Enness has a great relationship with this lender which allowed me to negotiate a first charge mortgage of £197,000 on a 13-year interest-only term at a very attractive 6.37% variable rate.

This lender was also happy to offer a day one-second charge. This is very unusual as most lenders would require the mortgage to be in place for around six months before allowing this. The majority of the refinance was with a lender who can use a high net worth exemption for lending purposes.

They are one of the very few lenders who can offer a 2-year rolled up facility as a residential second charge providing that the client has net assets of £3million or more. My client had exactly that and we managed to secure a second charge of £1.57million mortgage on a 2-year interest only term at a rate of 8.99% rolled up for the duration of the loan.

My client will move into the property which he is building after 12 months and look to sell his existing property. This will leave him with an unencumbered house and £250,000 of cash to start a new project.

My client was delighted with the results that Enness was able to provide him. Following this deal, I have also refinanced my client’s buy-to-let properties and I will be working with him on his development projects. At Enness we believe it is of the utmost importance to create long-lasting relationships with our clients, and I am very proud of our reputation for this.