High Net Worth Mortgages
High Net Worth Mortgages
Paul Holland sits down and explains everything High Net Worth mortgages.
How does a High Net Worth Mortgage work?
Up to a certain level of higher net worth is very similar to a more conventional mortgage. Depending on the level of High Net Worth it could even be with a high-street bank.
Beyond that level, it could feel like there’s a little bit more work involved because of how complex the situation can be. It could even benefit the applicant to approach a private bank, in which case the process could be completely different.
Why are mortgages for High Net Worth individuals so difficult?
People with High Net Worth often have income scenarios that can be much more complex than just having a salary or being a Self-Employed company director. They could have multiple streams of income and lots of assets. There could also potentially be income that is held in different countries and currencies. Once you put all of those things together, it certainly makes the underwriting process a little bit more drawn out.
How much is considered High Net Worth?
Generally when a loan amount exceeds the half a million mark, it’s going to be looked at slightly differently from an underwriting perspective. It might be a large loans team at the bank instead of general underwriters and typically there will be some different parameters attached to the application.
Who qualifies as High Net Worth?
There is a more specific definition for that. The FCA (Financial Conduct Authority) criteria for High Net Worth individuals is having a personal income of over £300,000 or liquid assets of more than £3 million.
What can I borrow and what sort of deposit do I need as a High Net Worth individual?
This is a tough question to answer specifically, as there are so many potential different variables. It’s not always as simple as it might be for more conventional mortgages where someone that earns X amount might be able to get 4-6 times their salary. High Net Worth individuals may put up other assets or investments as collateral, for example. It would really be decided on a case by case basis.
Do High Net Worth individuals need life insurance?
It really depends on whether or not they want life insurance. Generally it’s a privilege that people have the option to take or not. There will be very few instances where a compulsory measure is to have life insurance with them, but generally speaking that won’t be the case.
It then depends on that person’s attitude to risk. If they want to have cover in place that means when they pass away certain debts and liabilities are covered by an insurance plan then that’s great. If they don’t feel the need then that’s also completely down to them.
Can you get a mortgage on a million pound house?
Absolutely, yes. I’ve personally handled multiple mortgages for multiple million pound houses. You can get mortgages on pretty much any building or security, it’s really just a case-by-case basis.
How can a Mortgage Broker like Henchurch Lane help in this situation?
As there really aren’t any straightforward answers to any of the above questions, hopefully it gives people a little bit of an idea of whether or not it’s worth going to a high street bank or whether they speak to a private bank.
The first port of call would be to start with someone like ourselves, at Henchurch, that knows where to direct you and can answer those ifs and and maybe’s. We would assess a client’s personal situation and go from there.
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