🏢 Case Study: London Refinance and Purchase – Luxury Property Financing – Strategic Solutions for High-Value Portfolio Expansion
Problem
📌 Client Profile:
- Existing Asset: £3 million buy-to-let flat in prime central London
- Investment Goal: Acquire a second property valued at £2.4 million
- Income Source: Derived from a French family trust
🚧 Key Financial Hurdles:
- Funding the New Purchase: Securing financing for the £2.4 million property without liquidating existing assets
- Income Verification: Demonstrating sufficient income from a foreign trust to satisfy lender requirements
Solution
- Cross-Collateralization: Leveraged both the existing and new properties as combined security, enabling 100% financing of the new purchase without additional capital outlay
- Combined Rental Income Assessment: Utilized the projected rental income from both properties to demonstrate adequate loan serviceability
- Trust Income Verification: Collaborated with the lender to ensure they were comfortable with the client’s income originating from a French family trust. Provided detailed documentation, including trust statements, legal confirmations, and historical income distributions, to address any concerns regarding the source and stability of wealth.
✅ 📢 This case underscores the importance of strategic financial planning and the value of leveraging existing assets to achieve investment goals, even when faced with unconventional income sources. If you have a complex financial structure and need expert guidance on securing the right financing solution, contact us today to explore tailored options that fit your needs.
Outcome
💰 The client successfully acquired the £2.4 million investment property without the need for additional capital outlay, effectively expanding their property portfolio.
- Cross-Collateralization: This strategy involves using multiple properties as collateral for a single loan, allowing borrowers to access higher loan amounts or more favorable terms. However, it’s essential to recognize that this approach increases risk, as defaulting could impact all properties used as collateral.
Foreign Income Considerations: Obtaining a mortgage with foreign income can be challenging, as not all lenders accept overseas earnings, and those that do may have stringent criteria. Factors such as currency fluctuations and the stability of the income source are critical considerations.
