Private Bank or Relationship-Based Lending: Everything High-Net-Worth Homebuyers Need to Know About Private Bank or Relationship-Based Lending

For high-net-worth individuals seeking tailored financial solutions and a premium level of service, Private Bank or Relationship-Based Lending offers a sophisticated approach to real estate financing. This exclusive lending model prioritizes personal relationships, discretion, and flexibility—making it ideal for affluent buyers with complex financial profiles or those purchasing high-value properties.

Here’s everything you need to know about how Private Banking can help you secure luxury real estate.

What is Private Bank or Relationship-Based Lending?

Private Bank or Relationship-Based Lending refers to mortgage and credit services offered exclusively to clients of private banking divisions within major banks or boutique wealth management firms. These lenders evaluate the entire financial relationship—not just income and credit—allowing for custom lending solutions that standard mortgage channels often cannot match.

The strength of the relationship between the borrower and the bank plays a central role in approval, terms, and flexibility.

Key Benefits of Private Bank Lending

• Customized Lending Solutions: Loan terms, structures, and repayment schedules tailored to the client's overall financial strategy.

• Access to Larger Loan Amounts: High-net-worth individuals can secure jumbo and super-jumbo loans often exceeding $5 million or more.

• Preferred Rates: Clients often receive preferential interest rates and reduced fees based on their overall banking relationship.

• Discretion and Privacy: Transactions are handled with high levels of confidentiality.

• Dedicated Private Banker: Personalized service through a single point of contact who understands the client's full financial picture.

• Portfolio-Style Underwriting: Holistic evaluation of net worth, asset management, and liquidity.

• Additional Wealth Services: Access to investment management, estate planning, tax advisory, and philanthropy services.

Private Bank Loan Requirements

• Net Worth: Often $1 million+ in investable assets with the bank.

• Credit Score: Typically 700+, though some flexibility exists based on relationship and assets.

• Down Payment: Typically 20%-30%, depending on property type and loan size.

• Debt-to-Income Ratio: More flexible than traditional lending due to overall asset picture.

• Asset Verification: Significant liquid or semi-liquid assets required.

Who is Private Bank Lending Best For?

• Ultra-high-net-worth individuals and families.

• Entrepreneurs and business owners.

• International buyers or foreign nationals.

• Buyers of luxury or unique properties.

• Investors with significant non-traditional income.

• Individuals who value privacy and bespoke financial services.

Property Types for Private Bank Lending

• Luxury estates and single-family homes.

• Penthouse condos and co-ops.

• Multi-million dollar investment properties.

• Vacation homes or second residences.

• Waterfront, equestrian, or unique luxury properties.

How Private Bank Lending Works

1. Establish Relationship: Typically requires existing banking or investment relationship with the private bank.

2. Customized Financial Review: A dedicated banker reviews all assets, liabilities, income sources, and financial goals.

3. Tailored Loan Structure: Terms are customized, including options for interest-only payments, balloon terms, or cross-collateralization.

4. Discreet Process: Transactions are handled privately, often with faster decision-making and personalized underwriting.

   
   

Example:

A private banking client with $10 million in investable assets and an entrepreneurial income stream may receive a $4.5 million mortgage on favorable terms, with interest-only payments for the first 7 years, without the rigid guidelines of standard lending.

Private Bank Lending Considerations

• Requires Strong Relationship: Often limited to clients with significant assets under management.

• Higher Loan Minimums: Typically reserved for high-value transactions (often $1 million+).

• Flexible But Strategic: Customized terms require careful long-term financial planning.

• Privacy Protections: Ideal for clients who prefer to keep financial dealings discreet.

• Cross-Collateralization Option: Some loans can be secured against investment accounts or other assets for better terms.

Steps to Getting a Private Bank Mortgage

1. Engage Private Banking Services: Begin by opening accounts or transferring assets to the institution.

2. Meet with a Private Banker: Discuss financial goals, liquidity, and property plans.

3. Customized Proposal: The banker presents tailored mortgage solutions.

4. Documentation and Approval: Full asset review and streamlined underwriting.

5. Close with VIP Service: Enjoy a white-glove closing experience.

   
   

Quick Private Bank Lending Snapshot:

Final Thoughts

Private Bank Lending offers unparalleled flexibility, privacy, and customization for high-net-worth individuals purchasing luxury real estate. By leveraging a holistic view of your wealth, private banking provides financing solutions that align with your broader financial strategy while delivering exceptional service.

If you’re considering a luxury property and value a bespoke financing approach, I would be honored to help you explore your options through relationship-based lending.

Contact Kereen Henry Luxury Associate Broker | Keller Williams 404-210-1674 | www.kereenhenry.com