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How First Western Trust Can Help With High-Net-Worth Mortgages

March 15, 2023

Mortgages for high-net-worth individuals can be vastly different from traditional home loans. These potential homebuyers usually have a high amount of available cash. In addition, they usually own many longer-term investments such as stocks, bonds, and real estate. Since they may not have a traditional job, their employment income is not always an accurate indicator of their financial means. These factors require partnering with a bank institution that understands unique financial situations and has home loan options to meet the needs of its clients.

Only some banking institutions provide services for high-net-worth individuals (HNWIs). Local banks and national chains often have services that work well for people with everyday financial needs. Fortunately, private banking institutions can offer the resources and terms necessary to provide favorable financing for high-net-worth mortgage loans.

Mortgages for High-Net-Worth Individuals

Mortgages are a crucial part of high-net-worth lending, but the terms for these mortgages are often quite different from those for the average homebuyer. When considering their mortgage applications, private banks consider an HNWI’s entire financial picture in addition to their liquid assets.

High-net-worth mortgage loans may include interest-only options that allow HNWIs to pay only interest for a period such as 10 or even 30 years. At the end of that period, the home’s value will often have risen significantly, ensuring a solid profit if the owner sells.

Why High-Net-Worth Individuals Rarely Buy a Home Outright

Some people wonder why HNWIs take out a mortgage at all. Why not just buy the home outright from their cash holdings? The answer is simple. These clients can make more money by investing in other opportunities instead of tying up their cash in a home. The interest they pay on a mortgage is far less than they can earn by investing that cash elsewhere.

These investors often see their homes grow in value while earning money from alternative investments. In short, wealthy investors can double-dip financially by financing a home. Both private banks and HNWIs benefit from their financing partnership.

Final Thoughts About High-Net-Worth Lending

HNWIs need different mortgage terms than the average person simply because they offer little risk to banks. They often have the cash to buy a home outright but choose to use their liquid assets for other investments. Private banks can provide them with excellent terms, such as low down payments, interest-only mortgages, and other generous financial arrangements. Private banks can afford these deals because they benefit from managing their clients’ money, and HNWIs are happy because they can invest their cash elsewhere and reap higher ROIs.

The First Western Trust Advantage

First Western Trust offers specialized private banking services to high-net-worth individuals, including all types of mortgages for all personal needs. The skilled professionals at First Western Trust understand the needs and mortgages of high-net-worth individuals.

The bank’s highly trained staff understands all aspects of wealth management. Contact us today for more information about our financial services, including high-net-worth mortgage loans.

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