High Net Worth Mortgages - How to Get a High Value Mortgage
Simple Fast Mortgage assists wealthy individuals from the UK and overseas to secure bespoke high net worth mortgages from our offices based in Altrincham, Manchester & Holborn, London. We provide a discreet and professional property finance service, and offer a personalised approach to your individual circumstances.
High Net Worth Mortgages
Did you know that Broadway, Hale is one of the most exclusive and expensive places to live in the UK outside of the South East? It’s an area we know well due to its proximity to our offices and customers regularly turn to us to find mortgages and refinancing for properties located there. Many of our customers are individuals who need High Net Worth mortgages and we have built up a great network of private banking contacts in order to help them. Keep reading to find out more or get in touch on 0333 090 2025 if you want to discuss your position in confidence.
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What is a High Net Worth Mortgage?
A high net worth individual, according to the FCA (Financial Conduct Authority), is either someone earning more than £300,000 per year, a person with net assets of at least £3m or someone ‘whose obligations are guaranteed by a person with an income or assets of such amount.’ Despite their earnings or net assets, it may surprise you to hear that high net worth individuals can struggle to get a mortgage on the high street, either due to the large mortgage size they are requesting or the complexity of their income. There are other, more exclusive private banks such as Coutts, who are more than willing to help and with our knowledge and experience, we can recommend the one that’s right for your situation. Contact Us to find out more.
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What is a High Net Worth Exemption?
When applying for a mortgage, customers normally have to pass stringent affordability criteria to ensure they can afford the mortgage. In the case of wealthy customers, passing affordability checks can be difficult because their income is more complex. This makes proving their income, using standard documents that a lender normally requests, difficult. The High Net Worth Exemption is an FCA provision to help in situations like this. It encourages lenders to look beyond their standard affordability and to exercise their judgement as long as they lend responsibly. Contact us to find out if this is something that you qualify for.
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Market Wide Advice
An unlimited comprehensive range of mortgages from lenders across the market including many exclusive deals
Flexible appointments including evenings and weekends to suit your busy schedule because we understand you are busy
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Free initial consultation to assess your needs and provide helpful initial advice so you are fully informed to make decisions
Stress Free Process
Our professional and friendly team will help manage every aspect of the mortgage process through to completion
Free Lifetime Reviews
Free periodic reviews to make sure everything is working as it should be and that you remain on the best deal
Protecting your needs
Personalised advice on life and home insurance to ensure that your home and family are protected if things go wrong
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What Are Asset Backed Mortgages?
Asset backed mortgages are another option available exclusively to high net worth individuals. Unlike a traditional mortgage which is secured against the property, an asset backed mortgage is secured against an individual’s assets such as fine art, an investment portfolio, luxury vehicles or jewellery. This type of mortgage is very bespoke, only available to eligible clients and offered by just a few private banks. To find out if you are eligible for an asset-backed mortgage, call us on 0333 090 2025.
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What Income Can I Use For a Large Mortgage?
The income used to assess your application for a big mortgage will depend on your personal circumstances. Income for high net worth individuals does tend to be more complicated and can come from multiple streams – onshore / offshore trusts, investment portfolios, property portfolios, limited companies… we’ve seen it all. The income requirements vary depending on the source of income and the lender. You’ll need to provide either a selection of documents showing your income or a statement of high net worth from your accountant. Whichever you need, we’ll confirm when you apply.
Can I Get a Large Mortgage With Low or No Income?
Some customers with low or no income who have considerable assets, can get a mortgage. This is normally where the High Net Worth exemption (see above) comes into consideration. In such cases, borrowing is based on the size of your assets. Private banks assessing affordability based on assets can sometimes offer you a bigger mortgage than those offered by mainstream lenders.
Is it Better to Take Out a Large Mortgage Instead of Buying Outright?
Buying a property outright isn’t always right for your situation. For one thing, it ties up your money, reducing the liquid assets you have available and stopping you from being able to invest in other opportunities. Taking out a mortgage is also a good option if most of your net worth is in assets and you don’t currently have, or want, to use your cashflow to purchase a property. The availability of interest only mortgages can make purchasing a property more appealing as you need to commit less cash each month.
Why Should I Consider an Off-Market House Purchase?
Some of our customers buy properties off-market. Off-market purchases differ from normal purchases as they are marketed discreetly. Instead of using traditional methods such as online listings or adverts in estate agent windows, these properties are promoted discreetly by a small number of professionals and the vendor’s contacts via private networking. In recent years, this kind of sale has increased in popularity with many of the properties sold falling in the luxury and high-end part of the market. Some vendors sell off-market for sensitive reasons such as debt, divorce or death but others sell in this way if they have a high media profile. With off-market purchases, the sale is handled privately with the selling price known to only a select few in order to remain discreet.
Our advisors regularly provide mortgages for customers who buy through off-market purchases. If discretion is your primary concern, you can rest assured that we will treat your purchase with the utmost confidence and the highest respect for your privacy.
Which Lenders Provide High Value Mortgages?
You’ll find that both mainstream and private lenders offer mortgage products for those with high net worth. In the case of traditional lenders, whilst rates can be more competitive, the criteria is usually tighter and more restrictive. You’ll apply as normal but as their process uses computers, you may face issues when trying to get mortgage approval. Alternatively, specialist lenders and private banks are more personal, and will look at you on a case-by-case basis with a more flexible approach. There are specialist private banks who specifically cater for high net worth individuals. Some offer lower rates if you place some of your assets with them so this is something to consider.
What Are The Rates on High Value Mortgages?
The rates and fees for a high value mortgage will depend on your personal situation and the lender. We negotiate mortgages for our clients on a case-by-case basis in order to provide the flexibility that you require. Our advisors have relationships with private banks that have more flexible rules helping us secure rates that aren’t widely available. Other available options include interest only mortgages – repaid by liquifying assets or selling the property, or offset mortgages – linked to savings accounts to reduce the interest paid on the mortgage whilst retaining access to cash on deposit.
Is an Offset Mortgage a Good Option for High Net Worth Individuals?
An offset mortgage is a mortgage with a link to a savings account. Your savings offset your mortgage and reduce your monthly payments and the amount of interest you pay. You won’t earn interest on your savings but as mortgage rates are usually higher you’ll usually be better off. An offset mortgage can be a good idea for high net worth individuals as it also reduces your tax liability. You don’t pay tax on a savings account linked to a mortgage and you’ll still have access to your savings. It’s worth noting that interest rates can be higher on offset mortgages, speak to our mortgage advisors for more information.
How Large A Mortgage Can I Borrow?
Whilst traditional high street lenders typically lend up to 4.5 x an individual’s income, some private banks will lend more and sometimes up to 7 x depending on your net worth. Our advisors will be able to tell you more when you Contact us. It’s often the case that some individuals with high net worth also require a higher LTV mortgage due to their income being tied up in assets. Traditional high street lenders typically will require a larger upfront deposit for the purchase of a high value property, but higher LTV products are available through some private and specialist lenders. The exact amount you can borrow will depend on your situation, call us on 0333 090 2025 to speak to one of our expert brokers who can advise you further.