High Net Worth Mortgages
Contrary to what people think, high net worth mortgages are more difficult to obtain than the average mortgage, especially from high street lenders. Here at Davidson Deem, we are specialist mortgage brokers for all types of professionals. If you’re a high net worth individual finding it difficult to get the mortgage you desire, then get in touch with us on 01202 884 111 and we will be able to help you.
What is a High Net Worth Mortgage?
A high net worth mortgage is a mortgage that is lent to an individual that is considered to have a high net worth. To be classed as an individual that has a high net worth, you need to have an annual income of £100,000. Additionally, the mortgage amount that the individual is applying for will usually exceed £1,000,000.
Why is it Difficult for High Net Worth Individuals to Receive a Mortgage?
By having high assets, one would think that it would be easy to receive a mortgage. However, with high net worth individuals, this has never been the case, especially since the global financial crisis in 2008.
Mortgage regulations have tightened, and mortgage lenders are now stricter on who they’re willing to lend to. High street lenders have a box-standard formula that they run their applicants through and if they don’t pass, then the high-street lenders will be unlikely to approve them for a mortgage. High net worth individuals usually don’t meet the requirements of the criteria as the approach doesn’t take the complete financial profile of the applicant into account.
The biggest cause of high net worth mortgage difficulties is the irregular income of the high net worth individuals. Many will have received their wealth from inheritance, irregular income from investments, and many will have their wealth held inside trusts and spread across numerous territories. High street bank lenders want the borrowers to have a steady source of income to guarantee that they will be able to meet their repayments. Because high net worth individuals may not receive a constant source of income, they become undesirable to high street lenders.
In many cases, when high net worth individuals seek a mortgage, it isn’t always for a permanent residence; they can be purchased as a holiday home, an investment or somewhere for a child to live whilst studying at university. This can deter mortgage lenders from accepting their application.
Why not Purchase the Property Outright?
Many ask the question: why would a high net worth individual need a mortgage? Even though wealthy individuals own many assets, they may not have access to enough capital up-front to purchase a property outright. Additionally, many don’t want to invest all their disposable income in real estate and want to maintain their liquidity. As a result, these individuals seek out a mortgage. But borrowing over £1m is a substantial amount of money that many lenders aren’t willing to take the risk with.
Who Offers Larger Mortgages?
With property prices continually on the rise in places such as London and metropolitan cities due to inflation and Brexit, it’s not uncommon to need a mortgage into the millions to afford the property that you want to purchase. Even though high street lenders are unlikely to lend high mortgages, there are specialist lenders and private banks that would be willing to lend to high net worth individuals, especially if they have the assistance of a specialist mortgage broker.
How can Davidson Deem Help with High Net Worth Mortgages?
Here at Davidson Deem, we are specialist mortgage brokers in the UK that are dedicated to helping each special case receive the mortgage that they need; this includes high net worth mortgages. We’ll take the time to closely examine your financial situation and what you’re looking to achieve in a mortgage.
As your specialist high net worth mortgage broker, we:
- Talk directly with underwriters at specialist and large banks. Due to our experience in the industry, we have close relationships with many lenders that would be unwilling to lend to an applicant without the assistance of a mortgage broker. Additionally, you may not even be able to find these lenders if you’re applying for a mortgage yourself.
- Understand the special circumstances surrounding high net worth mortgages. We understand how offshore investments, family trusts, multi-currency accounts work in addition to many other financial profiles. By talking to you about your financial situation and looking at your accounts, we can make a compelling case to mortgage lenders on your behalf.
- Can manage large mortgage loans and the processes that you need to go through.
- Help you get in touch with financial advisors to assist you with your funds.
- Secure high loan to value mortgages. Many lenders that approve a high net worth individual will only be willing to lend 70-75% of the loan to value ratio. By using a specialist mortgage broker from Davidson Deem, we can help you secure mortgage loans of a 95% loan to value ratio.
- Work hard to get your application approved as soon as possible. We understand that you may have your eye on a dream property which will be highly sought after. We will move quickly enough to ensure that your mortgage application is processed as quickly as possible, so you can secure that property you have your heart set on.
- Can find you competitive rates of interest. Due to the special circumstances surrounding high net worth mortgages, many lenders will accept the application with high rates of interest. Here at Davidson Deem, we know how to pitch your case with lenders to get a desirable rate of interest. Additionally, we can get access to exclusive rates of interest that you won’t be able to find without a specialist mortgage broker.
Receiving High Net Worth Mortgages
High net worth mortgages don’t have to be difficult to obtain if you have the help of a specialist mortgage broker. What’s great about the specialist mortgage brokers at Davidson Deem is that we will always provide a tailored and personalised approach to each case. Once you get in contact with us, you will form a close and trusted relationship with one of our mortgage brokers as you will always have dealings with the same mortgage broker.