Private bank mortgages are often well-suited to high net worth borrowers because privately owned companies will assess every finance application individually. Private Banks will take a view on a client’s more complex income structure and assess the affordability of the loan by looking at a wider range of factors.
If you have assets worth over £1m, or are looking to borrow more than £500,000, then a private bank could be a viable option for your mortgage needs.
Read on to learn more about the various advantages of applying for a mortgage with a private bank (and how you can rely upon Large Mortgage Loans to source the right deal for your circumstances, regardless of your requirements).
Why take out a mortgage with a private bank?
Private Banks or lenders can usually offer much more competitive mortgage products compared to those on offer from traditional High Street banks.
Private mortgage lenders are more willing to consider individual financial situations and lend accordingly with a bespoke tailored product. This might mean that when applying for a private bank mortgage, clients are able to apply for a large mortgage amount, be considered for an interest-only loan, or are able to use multiple income streams to prove their eligibility for finance during the mortgage application process. Due to the relative rigidity of their underwriting processes and their eligibility criteria, most mainstream lenders would not be able to offer such attractive borrowing terms.
Do private mortgage lenders have different mortgage lending criteria to High Street banks?
Much of the same lending criteria will apply for a private bank mortgage, regardless of the position of the lender. In order to successfully secure a mortgage, you will usually need to prove that:
- You have a sufficient deposit to put down on the property
- You have a steady income – even if your earnings do not come from a single source
- You do not have any significant outstanding debts
- You can afford to make the agreed monthly repayments throughout the course of your agreed mortgage term
However, as we will discuss here, private mortgage lenders are often prepared to take a view on some or all of the above factors when deciding whether or not to offer you a mortgage agreement. Unlike mainstream lenders, they often have the flexibility and the advanced underwriting expertise to develop bespoke deals – therefore a private bank mortgage may be the right option for clients whose financial affairs are not necessarily simple or straightforward. They are inclined to look at the bigger picture to find a solution that works for everyone.
A Private mortgage lender may also be prepared to lend on high risk properties, such as a converted building, a thatched cottage or a Grade I listed building.
If you have a complex income structure, will you find it easier to secure a mortgage with a private bank?
In most cases, yes. Private banks are notorious for lending a helping hand to high net worth clients who have a more complicated income arrangement.
For example, if your earnings include bonus payments, profit-sharing agreements, or income and dividends from self-employment, you may struggle to meet the criteria set by High Street banks, even if you can comfortably the afford mortgage repayments. However, a private lender will never discard your application without reviewing – and stress testing – your entire income structure, looking at each stream of income and assessing the feasibility of the lending agreement.
Are Private Bank Mortgage rates negotiable?
With a private bank mortgage, this will depend highly on the lender itself. But private mortgage lenders will be able to discuss their rates openly and will work with you, their client, to agree a deal that’s suitable for all parties. They are able to do so because each private bank mortgage is assessed on a case-by-case approach towards lending.
How can we help you secure a mortgage with a private lender?
Our team of specialist mortgage adviser have successfully placed many private bank mortgage applications with private lenders on behalf of our high net worth clients.
Thanks to our network of trusted private mortgage lenders, we have the contacts to secure mortgages for those who are in more complex financial situations. We will guide you through the application process with the aim of negotiating the most competitive and suitable mortgage for your personal requirements, eventually leaving you in a position to place an offer on your dream property.
Contact our specialist brokers today to discover how we can help you secure a large mortgage loan with a private bank or building society.
