High Net Worth Mortgages
High Net Worth Mortgages – Exploring the options
Despite their wealth, High Net Worth individuals often find it difficult to get a mortgage. With the right advice, though, you should be able to find a suitable product to achieve your property plans.
What does High Net Worth mean?
High Net Worth individuals are people with an annual income or net assets worth between £500,000 and £25 million.
The financial services industry created the term ‘High Net Worth’ to describe wealthy clients who often have complex income streams and financial situations.
Why would I need a High Net Worth Mortgage?
High street lenders often won’t approve High Net Worth individuals for a standard mortgage. A common issue is that wealthy people often have irregular income – or no formal income at all, which means they don’t fit the criteria for a standard mortgage.
If you are seeking a large mortgage that can also be a challenge, as many lenders will only fund properties up to £1 million in value.
What is the maximum LTV % on a High Net-Worth Mortgage?
While 95% mortgages do exist, they have a maximum property value of £600,000. Generally, a high loan amount often has a lower maximum Loan to Value (LTV).
On a £1 million home, the maximum Loan to Value could be 75% of the property cost – which means you will need a cash deposit of 25% or £250,000.
Many high net worth individuals find this a challenge, especially if their wealth is tied up in assets and not available as cash. Some specialist lenders and private banks may offer mortgages at higher LTVs, however. These lenders may also be more flexible in how they assess income and will design a bespoke mortgage to suit you. They may accept commercial property and other assets as a basis for borrowing.
Are there low income / High Net Worth Mortgages?
It is challenging to find a standard mortgage that would suit a High Net Worth client who has a low income. But because we work with a number of private lenders, we will discuss your specific situation to identify suitable options.
How will my income / wealth be assessed?
With standard mortgage applications, lenders base their offer on the customer’s annual income. The norm is to offer a loan of 4-5 times the applicant’s salary, as long as they can provide proof of income.
This process may not suit a High Net Worth individual, however. You may not receive a regular annual salary, for example.
In this case, we will seek out a specialist lender that will take your assets into account for the affordability assessment. They may also be more flexible in considering your ability to repay the loan. Assessing your wealth will involve the lender seeking proof of asset ownership.
Are the interest rates on High Net Worth mortgage rates the same as standard residential mortgages?
Some High Net Worth clients find that they meet standard residential mortgage criteria, in which case they can access typical interest rates.
But interest rates are only part of the picture. It is also important to compare other factors such as fees, flexibility and criteria, to make sure that the mortgage is right for you.
Some private lenders will structure the mortgage payments to suit your personal circumstances – for example, you could choose to make an annual rather than monthly mortgage payment. You may also want a flexible mortgage with no early repayment fees should you want to reduce your debt with a lump sum.
Your mortgage broker will discuss these options with you and find a solution that best meets your needs.
How can Yellow Brick Mortgages help?
Yellow Brick Mortgages works with many High Net Worth individuals to find appropriate mortgage deals. We understand the nuances of buying property when your financial situation doesn’t fit the standard approach to mortgages.
We will explore your specific financial situation and reach out to appropriate lenders across the mortgage market on your behalf. That way, we narrow down the options to help you make an informed choice that will achieve your goals. Contact us today to see how we can help you.
Yellow Brick Mortgages is an appointed representative of The Openwork Partnership, a trading style of Openwork Ltd, which is authorised and regulated by the Financial Conduct Authority. We are registered in England and Wales.
Your property may be repossessed if you do not keep up with your mortgage repayments.