There are two main differences between the ‘celebrity’ and ‘regular’ borrower. These are needs (which are often more unusual for the celebrity) and circumstances (which is often more complex, due to the way that the celebrity makes money).
Celebrities often need larger loans for more complex deals
On average, celebrities buy property that costs more than average. Financing and deal structuring can get more complex once we get into the realm of seven (or eight) figure mortgages.
Want to find out more about financing a large loan? Take a look at our large mortgages article. We work with brokers with expertise in arranging large mortgage loans and high net worth mortgages.
Celebrities do international business
Being paid in multiple currencies, and overseas tax liabilities can also cause trouble with many lenders. It can also be different for foreign citizens (who don’t officially have a permanent home in the UK and are often classified as ‘non-domicile’)
Celebrities need total discretion
High profile borrowers such as celebrities require a certain amount of discretion beyond what is normal. Buying property through trusts or a pseudonym is not at all uncommon. Confidentiality is non-negotiable - and not every lender can provide the level of secrecy that is required.
Celebrities have unusual income sources
Celebrities often make their money through a variety of income streams. The mix of personal and business finances can create a complex financial profile that some lenders just aren’t able to properly categorise or work with.
Not only that, but careers can be unpredictable and celebrity earnings can vary dramatically, year over year - depending on the success of various projects.
Mortgage brokers for famous people have the skills and the professional network that a celebrity needs for their specific needs and background. A great broker takes the time to understand a borrower’s circumstances and needs before tailoring applications to a shortlist of carefully chosen lenders.
How do mortgages for athletes work?
You don’t have to be a celebrity sportsperson to have unusual financial needs. In fact, many professionals and semi-professionals at all levels and sports and face similar financing issues.
Despite the fact that many athletes and e-sports professionals do quite well from an earnings point of view, they’re often viewed as high risk by lenders. Why?
Various, unpredictable income streams
The income of your ‘typical’ pro or semi-pro is not typical. There can be a huge variation on a yearly basis, based on prize money, sponsorship, grants/lottery funding and many other variables, some of which aren’t taxable. The unpredictability of fixed-term team/club contracts can also be an issue for some people.
Sportspeople also and often take some of their earnings in foreign currencies, or pay tax overseas - another factor that can create issues with some lenders.
As we know, many sports careers have a shorter shelf life than conventional careers. One issue is injury, which can quickly end a promising career.
Some lenders are hesitant about lending beyond the timeframe of an athlete’s professional career, which, in some sports can be as short as 10-15 years.
As a result, mortgages for sports men and women are often shorter than normal - only spanning the predicted length of the athlete’s primary career. Lenders will want to know that the mortgage can be maintained after the main career ends, so they will be looking for the security of athletes moving into coaching/commentary work at the end of their playing career.
How do mortgages for actors and entertainers work?
Actors and entertainers of all kinds (whether famous or not) also bring complex financial backgrounds to the table. In fact mortgages for actresses and actors can be quite similar to mortgages for the self-employed - this is because many entertainers are self-employed, working on a ‘gig’ basis.
Contract based work
Entertainers often work fixed-term contracts (as opposed to permanent jobs), which can result in the kind of income fluctuations that scare some lenders off.
Additional income streams
Often, entertainers gain additional income from things such as merchandise, ticket sales, and sponsorship. Like the athletes given above, they often work abroad, receiving income and paying taxes in other currencies.
Getting a mortgage using endorsements
If you're planning to use revenue generated from endorsements to secure a mortgage, you may have difficulty getting one with a high street lender. This is because endorsements are classed as 'non-standard' income, and many lenders aren't flexible enough to accept this. They often prefer applicants with pay as you earn (PAYE) salaries because they see regular income as less of a risk.
Luckily, there are specialist lenders who can accommodate those with non-traditional revenue streams. The advisors we work with can put you in touch with private and high net worth lenders who accept this type of income. Make an enquiry to get started.
Getting a mortgage through sponsorships
If you want to factor in revenue earned through one or multiple sponsorships as part of your mortgage application, then the process will be similar to how endorsements work.
However, sponsorships tend to offer a more ongoing commitment between the parties involved compared with endorsements, so niche lenders may take this into account when generating your mortgage quote.
We work with advisors who specialise in niche lending and they can connect customers to lenders who accept this sponsorships as declarable income. Make an enquiry here.
Why is getting mortgage advice important, no matter how famous you are?
As a result of the complexity of their finances and their specific needs, a great many celebrities, entertainers and sports people use mortgage brokers. There are a number of good reasons for this.
It provides better access
Fully independent, whole-of-market mortgage brokers have a painstakingly built network of connections and access to the kind of more flexible lenders who can help a person with an unusual financial background and specific needs.
These include private banks, investors and other specialist lenders with experience in financing unusual cases.
It’s more efficient
Mortgage brokers have experience in financing unusual cases (such as celebrities and high net worth people). This can get things done more quickly and more cheaply.
Time is often of the essence when it comes to arranging financing for complex deals under a tight deadline, and the right financial product can potentially save a borrower thousands of pounds in the long term.
It provides more and better options
Access to a larger lender base can bring with it more and better options. These include such as interest-only terms, better interest rates, higher LTVs and flexible term lengths.
These are the kind of loans that are not easily available on the high street (though some high street lenders provide them).
Get the ‘celebrity treatment’ by talking to a broker who is an expert when it comes to getting mortgages for celebrities
No matter how famous you are, and however you make your money - a great mortgage advisor can help you to find the ideal financing solution for you, with 100% discretion and tact.
Need a little help? Call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry here.
Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. - We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.
*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA.Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes.
The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete's presence in the industry as the 'go-to' for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!
Read more about Pete here...