HIGH VALUE MORTGAGES
Purchasing your dream home in a highly desirable location or buying the perfect holiday home can be challenging due to the often-complicated high-value mortgage market. Many buyers struggle to get the best high-value mortgage deal from lenders without obtaining expert assistance.
A high-value mortgage is available from high-street lenders, but they typically offer strict terms and criteria that they are unwilling to negotiate. So your best option is to speak with private banks and specialist lenders that have demonstrable experience in catering to the requirements of ultra-high-net-worth individuals.
Hectocorn’s market knowledge and access to all the key players in this niche market can help you secure the best high-value mortgage terms. We help ultra-high-net-worth individuals all over the world to strike the best deals on high-value homes and buy-to-let properties.
High-value mortgage interest rates vary based on which lender you speak to. Factors like arrangement fees, international regulations and the loan-to-value (LTV) ratio will impact how your offer is structured. As a result, most lenders offer bespoke prices and terms, which can be shaped based on your circumstances, background and intentions.
The amount of money you can borrow for a high-value mortgage depends on the property you’re looking to purchase, where it’s located and your background and financial circumstances. In some cases, private lenders are willing to offer an LTV of 50% to 75%, which can increase to 100% if you’re willing to place assets under management to minimise the risk for the lender.
Your rates are also likely to fluctuate based on your purpose for using the high-value mortgage. Common options include:
Securing a high-value buy-to-let mortgage can be extremely challenging. Factors like the expected rental income and your overall annual income, assets and ownership structure all play a critical role in how your mortgage will be structured. So it’s important not to approach a high-value buy-to-let mortgage in the same way as you would a mainstream buy-to-let mortgage.
As property values increase both in the UK and internationally, we receive more inquiries about high-value international mortgages. It’s common to see individuals being rejected by high-street banks, which are unwilling to agree on terms that work for both parties. This highlights the importance of gaining access to specialised lenders worldwide, especially those with a focus on prime European locations such as London, the South of France, the Swiss Alps, Spain, Portugal, Italy, Germany and Greece.
Securing a high-value mortgage for an international property can often come with its own set of complications and surprises. This makes it vital to understand the process and read the fine print of all agreements to get the best deal possible.
Private banks generally prefer to establish long-standing relationships with clients, which typically sees them asking clients to put their assets under management (AUM) with the bank to act as collateral against a loan. AUMs often include stocks, shares, cash or property and, in most cases, lenders will ask for them to comprise around 25% of the total loan value. As demand for high-value mortgages continues to increase, private banks have become more flexible with their lending criteria and requirements when it comes to placing your AUM.
As an example, if you wanted to borrow £2.5 million to purchase a property in Chelsea, you would need to place £625,000 worth of AUM with the bank’s asset management division. This way, if you were to encounter financial difficulties during your mortgage term, the bank would have at least £625,000 worth of assets to fall back on.
The term dry lending refers to mortgages that don’t require assets to be placed under management with your lender. Buyers’ circumstances can change over time, so lenders take into account your overall wealth and existing investments when negotiating a high-value mortgage.
Some lenders will offer high-value interest-only mortgages as a standard option. When purchasing a property in the UK, the Financial Conduct Authority’s high-net-worth exemption provides support for even the most financially demanding clients, which offers greater flexibility in your high-value mortgage search.
Private lenders are more agile than high-street banks when it comes to securing the best high-value mortgage deals. These specialised providers help you to obtain additional perks, including personalised rates and bespoke underwriting, as well as a more efficient application process.
A personalised service is particularly crucial, as private lenders invest more time into understanding your financial situation and tailoring the offering to your specific requirements. AUM is also a vital component of dealing with private lenders, who often require this to provide the best possible terms and conditions.
High-value mortgages present several challenges that buyers need to consider. The 2008 financial crisis had a significant impact on the real estate market, putting mortgages that were previously accessible suddenly out of reach for many. As a result, lenders became more rigid and uncompromising and the era of 100% LTV mortgages dwindled.
Securing a high-value mortgage can be a time-consuming process due to factors like high-street lending caps, high interest rates and providing evidence of affordability. It’s therefore vital to have a long-term plan that ensures a high-value mortgage works for you both now and in the future.
Securing a high-value mortgage can be challenging and overwhelming in terms of finding a loan that works for your specific requirements and getting access to the best deal possible. Hectocorn helps our clients secure the most competitive high-value mortgage rates from our extensive network of lenders.
We have established relationships with leading global high-value mortgage lenders ranging from specialist building societies to private banks. This insight and experience enables us to obtain the best rates regardless of any complex personal financial situations. We’ll analyse your circumstances to negotiate a high-value mortgage solution that meets your short-term and long-term goals.