High Net Worth Mortgages
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It’s not uncommon for High Net Worth individuals to find it difficult to get a mortgage – which seems a little counter-intuitive. With the right advice, though, you should find a suitable loan to achieve your property plans.
What is High Net Worth?
High Net Worth individuals are people with an annual income or net assets worth between £500,000 and £25 million.
The term ‘High Net Worth’ was coined by the financial services industry to describe wealthy clients, mainly because these are people who tend to have complex income streams and financial situations worth multiple million pounds.
Why might I need a High Net Worth Mortgage?
Some high street lenders won’t accept High Net Worth individuals for a standard mortgage. This particularly the case if you have irregular income – it will mean you don’t fit the criteria for a standard mortgage.
It can also be more challenging if you are seeking a large mortgage. Some lenders only offer loans worth up to £1 million.
What is the maximum LTV % on a High Net-Worth Mortgage?
The maximum Loan to Value on a typical mortgage is 95%, but generally these have a maximum property value of £600,000. The bigger the size of the mortgage, the lower the maximum Loan to Value (LTV) will generally fall.
On a £3 million home, you may find that the maximum Loan to Value is 75% of the property cost. That means you will need a cash deposit of 25% or £750,000.
Many high net worth individuals find it challenging to raise this level of cash. Often your wealth is tied up in assets and not readily accessible. If that’s the case, it’s usually best to approach a specialist lender or a private bank.
These lenders are likely to be more flexible in how they assess income. Certain banks will design a bespoke mortgage to suit you and your specific situation – accepting commercial property and other assets as a basis for borrowing, for example.
Can I get a Residential and Commercial High Net Worth Mortgage?
If your cash flow and property plans are complex, it’s even more important to talk to a mortgage broker. We have decades of experience in helping clients with all kinds of mortgage requirements.
Residential High Net Worth mortgages are generally straightforward with the right lender, but commercial mortgages usually need a more bespoke approach. Commercial property is always bought through a company – even for ‘mixed use’ property that has both commercial and residential space.
We also help many High Net Worth clients find suitable Buy to Let mortgages, for properties bought as an individual or through a limited company.
How will my income / wealth be assessed?
Every lender assesses mortgage applications on affordability – how much you can comfortably afford each month in repayments on your mortgage. They do this by exploring your income and other financial commitments.
But a high net worth individual may not receive a regular annual salary, or be paid large bonuses. Often standard lenders would not accept this as reliable income. If this applies to you, we may need to work with specialist lenders to find suitable mortgage products, especially for a high value property.
Private banks and specialist lenders may take your assets into account for the affordability assessment. They may also be more flexible around your ability to repay the loan.
What are interest rates like on High Net Worth mortgages?
There are many factors at play when sourcing a suitable mortgage – and interest rates are only part of the picture. We will compare multiple aspects such as fees, flexibility and criteria to make sure that the mortgage is right for you.
You may need specific features within your mortgage, for example. You may prefer interest only mortgages, to keep the repayments down. Some private lenders could allow you to make an annual rather than a monthly mortgage payment. Or, they may offer a highly flexible mortgage, where no early repayment fees are payable should you want to reduce the loan with a lump sum.
As your mortgage broker we will discuss these options with you and find the type of mortgage that best meets your needs.
How can The Mortgage Company Nottingham help as a High Net Worth mortgage broker?
We have worked with many High Net Worth individuals to achieve their mortgage goals. We are highly experienced in working with those whose financial situation doesn’t suit the standard, high street mortgage market. We regularly arrange multi-million pound mortgages for our clients.
After exploring your specific financial situation we will talk to the appropriate lenders within our network. We will explain all the options to help you make an informed choice. Contact us today to see how we can help you.
Your property may be repossessed if you do not keep up with your mortgage repayments.
The Mortgage Company (Nottingham) Ltd is an appointed representative of Sesame Ltd which is authorised and regulated by the Financial Conduct Authority. We are registered in England and Wales.