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Investment Banker Mortgages at Fitch & Fitch
At Fitch & Fitch, we understand the complex financial profiles of investment bankers, whose remuneration packages often include a combination of basic salary, bonuses, and sometimes stock options. Changes in government regulations and the nature of banker bonuses have introduced challenges in mortgage applications, with many facing complications in proving stable income due to fluctuating bonuses or stocks tied into remuneration.
Unique mortgage challenges for investment bankers
The financial landscape for investment bankers can lead to inconsistent income streams, making mortgage approval processes complex. High street lenders may hesitate to offer mortgages based on such fluctuating incomes, often failing to consider the true earning potential of investment bankers, particularly in the early stages of their careers.
Case Study 1: Securing an 85% LTV Mortgage for an Investment Banking Professional
Fitch & Fitch was approached by a client who was a Managing Director in investment banking with a particularly complex income structure. His compensation included a cash salary, annual allowances, annual bonuses, and deferred stock, paid in both US Dollars and Pound Sterling.
The client was looking to purchase a London home he had been renting, through a private sale agreed with his landlord. The home was valued at over £4 million, requiring a high loan-to-value (LTV) ratio of 85%. The challenge was finding a lender who could fully appreciate and consider all components of his income for mortgage affordability, given that his salary was only a fraction of his total earnings.
Fitch & Fitch leveraged its partnership with a Private Bank, known for their expertise in dealing with high-net-worth individuals with complex income scenarios. Their dedicated team for investment banking professionals enabled a holistic review of the client’s diverse income streams. We structured an 85% LTV mortgage that incorporated both interest-only options and capital reductions during the initial three years, followed by an ongoing amortising element. This tailored approach allowed the client to effectively manage his finances according to his 'lumpy' income structure, ultimately securing the family home he desired.
This case exemplifies how Fitch & Fitch, through innovative lending solutions and a deep understanding of unique client needs, successfully assists professionals in navigating the complexities of mortgage procurement in the high-stakes world of investment banking.
Case Study 2: Securing a 90% LTV on a £3m Loan for a Top Banking Executive
A high-net-worth client who had recently returned to the UK after working abroad. Despite a strong professional track record in banking, the client had just commenced a role with a new organisation.
The client needed a 90% loan-to-value (LTV) mortgage to purchase a property, a scenario typically challenging but possible under the right conditions for high-net-worth individuals. Complicating the situation was the fact that much of the client's wealth was invested in non-liquid assets like pensions, art, and collectibles. Additionally, the client could not provide evidence of future annual bonuses due to the recent career change.
Fitch & Fitch, leveraging its extensive experience with affluent clients in the financial sector, worked closely with the lender to evaluate the client's overall financial health. Recognising the guaranteed vesting shares included in the client's employment package, we were able to use these in assessing affordability. To address the high LTV request, we structured the mortgage over 15 years, divided into two segments, with planned capital reductions in the initial two years. These reductions were strategically scheduled to align with the vesting of the client’s shares, effectively lowering the LTV over time.
How can Fitch & Fitch help
At Fitch & Fitch, we recognise that mortgages for bankers can be complex due to the specialised nature of their income. Bankers often receive ‘lumpy’ incomes that are heavily reliant on bonuses and vested shares, necessitating bespoke mortgage applications. Our approach involves working with a select group of lenders who are flexible in their approach to finance and can appreciate the nuances of income tied to financial markets rather than steady paycheques.
We leverage our deep relationships with these lenders to ensure that your entire income portfolio is considered when applying for a mortgage. This strategy allows us to secure rates and mortgage values that surpass what might be available from conventional high street lenders, who may not fully recognise the value of your diversified income sources. By understanding the full scope of your financial achievements and potential, Fitch & Fitch aims to deliver mortgage solutions that truly reflect your worth, enhancing your buying power and investment capabilities.
Maximising your borrowing potential
Our relationships with specialist lenders and private banks allow us to negotiate competitive terms for our clients. By considering average bonuses over recent years and projecting future income, we can achieve higher loan-to-value ratios and more favourable mortgage terms than those typically available through traditional high street lenders. For investment bankers, whose remuneration often includes significant bonuses, vested stocks, or even earnings in foreign currencies, Fitch & Fitch offers bespoke mortgage services. This includes leveraging unvested stock and bonuses in mortgage affordability calculations, allowing you to maximise your borrowing potential. With access to both high street and private lenders, we can use up to 100% of bonus income for mortgage affordability, depending on your track record of bonus payments. We regularly arrange large mortgage loans at higher loan-to-values, often using income multiples of up to five times the salary.
Is it possible to use a signing-on bonus or vested stock?
It is indeed possible to use various types of bonuses and compensation for mortgage affordability. Lenders we work with accept a range of income forms, including signing-on bonuses, cash payments, stocks and shares, as well as deferred or vested stocks. Additionally, we can factor in bonuses that are confirmed but expected to be paid in the future. These types of income are acceptable even if they were earned from previous employment or outside the UK. Note that income received in foreign currencies may be adjusted to account for exchange rate risks.
Our team excels in securing large mortgage loans with high loan-to-value ratios for bankers, often using income multiples up to five times the salary. We also explore financing options for those receiving carry income, which can be added on top of regular salaries and bonuses.
For clients whose bonuses exceed their basic salary or are received in currencies such as the US Dollar, Fitch & Fitch has successfully facilitated substantial mortgage approvals, even when bonuses are significantly higher than the base salary.
Q&A: Mortgage Solutions for Investment Bankers
A: Absolutely. We recognise the complexities in the income structures of investment bankers, where mainstream lenders might only consider a small portion of bonuses or profit distributions. At Fitch & Fitch, we take a holistic approach, considering average bonuses, both vested and unvested stock from the past few years. This allows us to achieve higher loan-to-value ratios and income multiples than typically offered by high street lenders, catering to clients who often receive 30-40% of their remuneration in forms other than cash salary.
A: Bespoke mortgages are designed around your unique financial situation and future liquidity events, enhancing your cash flow management. The lender may be able to offer flexibility in their repayment plans, often allowing you to make overpayments to reduce the overall mortgage balance, thus tailoring the financial arrangement to better suit your lifestyle and financial goals.
A: You can borrow against the value of your investment portfolio, a quick and efficient lending method that enhances liquidity without the need to sell assets and potentially incur tax liabilities. This approach allows you to maintain your investment positions while accessing the funds you need for other purposes.
A: While banks typically require a larger deposit of up to 40% to access the most competitively priced rates, at Fitch & Fitch, we can facilitate mortgages for investment bankers starting at £500,000+ with as little as a 10% deposit. This flexibility ensures that you can access substantial mortgage products without the prerequisite of a large upfront investment.
What our customers are saying…
Investment Bankers Seeking Tailored Mortgage Advice?
If you’re an investment banker struggling to find a mortgage that truly reflects your financial stature, reach out to Fitch & Fitch. Our team specialises in understanding the complex income structures typical of the banking sector. We provide personalised advice and access to mortgage solutions designed to maximise your borrowing potential based on the full scope of your earnings.
For more details or to discuss your specific needs, contact our Private Office team via email at info@fitchandfitch.co.uk or phone us on 020 7859 4339. Let us help you secure your future with the right mortgage solution, precisely tailored to your professional and personal circumstances.
