You’d think it would be the easiest thing in the world. You’ve been highly successful in your life, invested wisely and, by anyone’s standards, you’re comfortably wealthy and able to buy just about anything you desire. Anything, that is, apart from a mortgage. Bizarre though that might undoubtedly seem, it’s a problem that faces many high net worth individuals (HNWIs) – and there’s a simple reason: because income taken by HNWIs is often not from conventional sources and wealth can be tied up in long term investments, lenders see them as high risk.
Income is the single most important factor for mortgage lenders in determining whether to approve an application or not, and the processes that banks and building societies now need to follow in order to meet regulatory requirements don’t give much room for discretion.
Indeed, the wealthier an individual is, the more complex their finances can be, making it even more difficult for lenders to unravel the information they need to see.
With investments straddling multiple portfolios, perhaps not all of them made easily liquid, and income irregular or even, on the surface of things, non-existent, a mortgage application can be challenging at best for HNWIs.
Interestingly, instances where HNWIs are refused an overdraft facility, credit card or mortgage are more common than many people perhaps think – and that’s largely because the criteria by which affordability is defined are often highly specific.
The very nature of investment is risk-based and so it shouldn’t be too surprising to find lenders being cautious around those who appear to have sizeable exposure, even though the net value of their investment assets is high.
And given the economic events of a decade ago, few of us are going to lament a lending process that seeks to prevent them from happening again.
But it does lead, inevitably, to frustration among HNWIs who find themselves at the mercy of an inflexible affordability assessment that doesn’t take account of a more holistic view of their financial circumstances.
Ultimately, the lenders that are prepared to adapt their businesses to meet the needs of both the majority of ‘ordinary’ borrowers whilst at the same time servicing the particular needs of HNWIs are in a minority.
That said, it doesn’t mean there aren’t lenders out there who have the expertise and knowledge to be able to service the needs of the very wealthy – which is why those people looking for a mortgage but who have unique finances should seek specialist advice from a broker or adviser who has access to the right network to help.
Equally, with the right preparation and groundwork around demonstrating income, it’s still possible for those with what lenders might view as challenging or complex financial circumstances to access conventional mortgage products. Again, it comes down to getting the right advice from the start.
At Oportfolio, we’re mortgage experts and when it comes to offering support and sound advice, we have a wealth of experience in advising people from all walks of life and backgrounds.
If you have an unconventional financial set-up and think you might struggle to demonstrate affordability to a potential lender, why not come and have a chat with us? We can offer you the right advice to improve your chances of finding the right mortgage to suit your needs.
Want to know how other clients felt about working with Oportfolio? Watch Gus and Selena’s video story!
To find out more about our friendly and professional mortgage service, fees and what we can do to help make sure you’re not paying over the odds for your mortgage, why not visit www.oportfolio.co.uk or give us a call on 020 7371 5063.
Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority
Your property may be repossessed if you do not keep up repayments on your mortgage.
Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.