Wet & Dry Lending
Many Private banks prefer to form long-term relationships with their clients. This is achieved by asking HNW clients to place their assets with them to manage (also known as wet lending). The assets can include stocks, shares and cash and act as security against a high-value mortgage. In return for this security, private banks are often willing to provide a higher income multiplier or a higher loan-to-value ratio for those willing.
Dry Lending refers to mortgages offered without the need for assets being placed under management with the lender. Instead, the overall wealth of a HNW individual is considered along with their income and assets. These assets can be held anywhere and are recognised when ascertaining the affordability and repayment details by the bank.