Navigating Mortgage Challenges for a Citigroup Investment Banker

Securing a mortgage as an investment banker, such as Citigroup, presents unique challenges due to the variability of income, particularly from significant annual bonus payments. Fox Davidson specialise in assisting investment bankers in overcoming these challenges. In this article, we will delve into the intricacies of investment bankers’ income, how lenders assess large annual bonus payments, and how Fox Davidson’s expertise facilitates successful mortgage applications tailored to clients with compensation packages that include large annual bonuses and stock. 

The Story

Investment bankers typically experience a compensation structure comprising a substantial base salary complemented by significant annual bonus payments. While these bonuses significantly contribute to their overall income, they introduce variability that can complicate the mortgage application process. We understand the unique financial situation of investment bankers and offer tailored solutions to address the challenges associated with their income structure.

The Challenge

Lenders evaluating mortgage applications from investment bankers often scrutinise the stability and predictability of income. Large annual bonus payments, being variable, can raise concerns about the consistency of an applicant’s financial position. Fox Davidson guides clients, including investment bankers from Citigroup, in presenting a detailed track record of bonus payments to demonstrate the reliability and stability of this income stream.

Variable Bonus Payments: A Track Record Matters

One crucial aspect that lenders consider when assessing bonus income is the track record of these payments. Having a track record serves as evidence of a consistent and reliable bonus income, instilling confidence in lenders about the applicant’s ability to meet mortgage obligations.

The Solution

Lender Variability: The % of Bonus Assessment?

Different lenders may adopt varying approaches when considering bonus income for investment bankers. Some lenders may be inclined to use 100% of the bonus payment in their affordability calculations, recognising the stability and reliability of the applicant’s bonus history. Others may adopt a more conservative stance, considering only 50% of the bonus income to account for its variable nature. Our extensive network includes lenders with diverse policies, allowing them to match clients with lenders whose criteria align with their financial profiles.

Income Multiples: Borrowing Beyond Conventional Limits

Income multiples play a crucial role in determining the amount a lender is willing to lend based on an applicant’s income. Conventional lenders often cap the borrowing multiple at 4.5 times the overall income. Fox Davidson, however, leverages its network to access lenders who are willing to lend beyond this limit and often up to and beyond 5.5 times overall income. This flexibility allows us to access larger mortgage amounts, providing clients with the financial capacity to secure properties that may be otherwise out of reach.

Loan to Values (LTV): Unlocking High-Value Residential Mortgages

Fox Davidson’s expertise extends to securing residential mortgage funding at high loan-to-value ratios, benefiting clients seeking high-value properties. Through solid relationships with lenders, Fox Davidson can facilitate mortgages with an LTV of up to 90% on purchase prices exceeding £1.5 million. This ability to secure financing at such levels underscores Fox Davidson’s commitment to providing comprehensive and flexible mortgage solutions tailored to the unique needs of high et wort clients. 

Conclusion

Securing a mortgage as an investment banker at Citigroup or any other bank demands a strategic approach that considers the variability of income, especially from substantial annual bonus payments. Fox Davidson excels in navigating the complexities of investment bankers’ financial landscapes, offering tailored solutions that address the challenges associated with bonus income assessments, income multiples, and loan-to-value ratios. 

To discuss mortgages for investment bankers with one of our advisors please do get in touch.