This week's case study highlights how Alexander Hall helped a divorcée get a mortgage by using her asset portfolio for affordability.
Our clients' challenge
Our client was recently divorced, and she was in receipt of the ‘decree absolute’. She now had significant guaranteed assets of cash and some stocks, but no sustainable income stream.
She wanted to purchase her own main residence at £2,500,000 and needed an initial mortgage of £1,500,000 to do so. She had met her bank initially to discuss her requirements but they told her they could not assist, as there was no recognisable mainstream source of income.
Alexander Hall's solution
We approached a private bank that specialises in asset rich but low-income divorce clients. They agreed to use the assets for affordability. They took our clients total net worth and divided this figure by the mortgage term. They then used the figure produced as an annual income figure, which was high enough to satisfy the private bank’s affordability test.
The loan was set up on an interest only basis with the first two years’ interest pre-funded, so our client had no initial monthly payments and could pay the loan back by cashing in her stocks at a future date (which was her intention). Our client was very happy with the outcome and the flexibility we afforded her.
