Some brokers operate under the incorrect assumption that high net worth individuals don’t need mortgages, and if they do, that the bank will have no problems issuing a mortgage to a person with considerable assets.
However, it is the complicated nature of the transaction that can make this a complex process.
High net worth individuals could require finance for anything from purchasing a second home to purchasing a hotel.
These complexities combine to make achieving a mortgage as a high net worth individual a potentially arduous task.
Here are some tips for assisting high net worth individuals.
1. Establish whether your client needs a high net worth mortgage
An individual who would require a high net worth mortgage fits the following criteria: an annual income of greater than £300,000, or a net worth of over £3m.
Once you’ve determined your client as a high net worth individual, you’ll be able to discuss mortgage options with the client.
2. Adopt a ‘human approach’ to lending
As a mortgage broker, your priority is to establish trust with your client to get a true sense of their financial position.
Your client’s honesty is critical in this regard.
Look at their case as a whole and do your best to understand how the parts fit together. You’ll need to know how much equity they have in assets, property and both retained and drawn out earnings from a business.
Ask your client to describe their financial position themselves to get the clearest picture. This forms the building blocks of the application process.
3. Sense check the scenario
After hearing your client describe their situation, take a moment to step back and consider all the information they’ve given.
Would you lend money to the current client if you were the lender?
If the answer is yes, then it’s very likely that a bank would agree with you.
Trust your intuition: if you would lend money to your client, it’s a good sign that you’re about to achieve a positive result.
4. Provide a bespoke solution
Once you have a sense of your client’s financial situation, ask them about any terms they would prefer in a mortgage and how this mortgage fits into their long-term plans.
When you’re armed with all the necessary information, you’ll be able to provide a completely bespoke solution.
Leave no stone unturned: check and re-check to find the very best deal for the client.
In my experience, high net worth clients appreciate loyalty: when you show them that you’re willing to work tirelessly for their benefit, they are very likely to give you their continued business.
5. Make your case
The pitch to the mortgage lender is more personal for high-value clients.
Unlike ‘high-street lending’, where applications are calculated via algorithms, these cases will be more closely considered by lenders.
This is why the leg-work is so important for this type of client.
Once you have all the facts, you can build your application around the client’s strengths to increase their overall likelihood of success.
Michelle Niziol is founder of IMS Property Group
