High Net Worth Mortgages

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High Net Worth Mortgages

Matthew Metcalf joins the Mortgage and Protection Podcast this time, to talk all about High Net Worth Mortgages.

Are there mortgages specifically for High Net Worth individuals?

There’s mortgages out there for all individuals, as long as they’re credit worthy and satisfy lender criterias. When you look at mortgages for High Net Worth clients specifically, there can be quite complex situations, so many clients need bespoke mortgage arrangements to suit them. This can sometimes be because of the complexity of their financial situations, which means there’s often a greater need for flexibility to access finance.

Why are mortgages for High Net Worth individuals so difficult?

Possibly because with High Net Worth clients, there are certain factors that determine how much they can borrow. High value lenders look at the client’s profile and other factors to determine how much they’ll be able to borrow and how they’ll structure the finance. It can be slightly different to just the standard calculation of using a multiple of their income. With high Loan to Value lending and High Net Worth clients, mortgages are quite often in excess of a million pounds, so lenders will need to know whether borrowers have got repayment plans in place to lower the loan value.

Speak To An Expert

Our highly experienced Advisers are ready to help you with either buying or remortgaging a home, protecting your property and lifestyle along with saving you time and effort, ensuring you have a competitive deal right for you.

Does net worth affect a mortgage?

High Net Worth individuals’ incomes can be a little bit more irregular, as their wealth may be coming from a number of different sources. For a Standard Residential Mortgage application, applicants are generally either employed or Self-Employed, so their income is easily proved with payslips and bank statements, or a tax return. High Net Worth individuals often have wealth from investments, inheritances and trusts across numerous territories, which is definitely more complex.

How much is considered High Net Worth?

From the regulator’s (the Financial Conduct Authority) point of view, somebody who’s got a net income of at least £300,000 or net assets of at least £3 million would be deemed to be a High Net Worth individual.

Who qualifies as High Net Worth?

Anyone with an annual net income of no less than £300,000 or with assets of no less than £3 million. If somebody has obligations that are guaranteed by a person with income of that level of assets, they would be classed as High Net Worth, too.

What can I borrow as a High Net Worth individual?

It’s not always as straightforward as general high street borrowing, but High Net Worth. Borrowers can, in some cases, use an Asset Ready Mortgage or Asset Qualifying Mortgage, which allows borrowers even with a low income. Because sometimes people with significant wealth don’t have an income.

For clients with over £3 million in assets, therefore, an Asset Ready Mortgage is an option. What they can borrow really does vary. High street lenders may offer multiples of four or five times an applicant’s income, whereas with High Net Worth it’s very much down to the individual.

Do High Net Worth individuals need Life Insurance?

Any client, whether they’re High Net Worth or not, should certainly have conversations around their protection needs. Just because someone’s got a lot more money or more assets, it doesn’t necessarily mean they don’t need life insurance from a mortgage point of view.

Life insurance is as important for High Net Worth as it is for those who are not High Net Worth, but High Net Worth clients might have assets that mean that they don’t feel the need for life insurance.

Speak To An Expert

Our highly experienced Advisers are ready to help you with either buying or remortgaging a home, protecting your property and lifestyle along with saving you time and effort, ensuring you have a competitive deal right for you.

Can High Net Worth Insurance cover my listed property?

There are numerous insurers that could insure listed buildings. There are different grades of listed property that can be insured with listed buildings insurance. Grade one, which makes up two and a half percent of the UK listed buildings. Grade two listed can be made up of special interest properties, but they make up the majority of the listed buildings in the UK. Grade two plus, makes about 5% of the listed buildings in the UK.

There are a lot of companies that will offer insurance against listed buildings, so you won’t necessarily have to go for High Net Worth Insurance cover to do that.

Who insures high value homes?

Standard home insurance policies might not provide a sufficient level of cover, so you may need to go to specialist High Net Worth home insurance providers, but a lot of property insurers cap at around £1 million – £1.5 million. At that point, you might need to branch out and go to someone a little bit more bespoke.

Can you get a mortgage on a £1 million house?

As long as the affordability is there, that’s definitely viable.

What about for a Self-build or a Buy to Let mortgage?

You can only find Self-build mortgages with limited lenders, but it’s viable for both Self-build and Buy to Let properties.

What are Large Mortgage Loans?

A loan is an arrangement to pay money back to a lender who loans money against the property. Larger loans generally have more competitive interest rates, subject to credit position. But it’s not too different to a normal size mortgage.

How can Yellow Brick Mortgages help?

High Net Worth mortgages are a little bit more bespoke, so if you walked into your local bank, you might struggle to obtain one, as a High Net Worth client. If you’ve got someone who looks after your finances, they might be able to point you in the right direction with regards to a bespoke lender. At Yellow Brick, however, we’ll certainly find a home for the client and would love to have that conversation.

Your property may be repossessed if you do not keep up with your mortgage repayments.

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