What key mortgage trends are you seeing in 2025, and how do they impact high-net-worth buyers?
The Federal Reserve’s “higher for longer” stance on interest rates continues to hold steady, driven by a resilient economy, strong employment figures, and inflation that remains above the Fed’s target range. As a result, elevated mortgage rates are likely to persist. However, high-net-worth buyers have navigated this environment with greater ease, as luxury real estate transactions increasingly involve cash purchases, reducing the impact of interest rates on decision-making. The luxury home market has remained strong and is expected to grow further as borrowing costs gradually decrease, allowing high-net-worth individuals to leverage bank financing more effectively.
Private banking presents another strategic advantage for affluent buyers. Banks prioritize asset relationships and often offer mortgage rate discounts in exchange for a broader banking relationship. It’s common to see interest rate reductions between 0.25% and 0.50% for clients who transfer assets, which can result in substantial savings when borrowing large sums. While not all investment banks offer direct mortgage financing, most have established relationships with mortgage lenders, providing high-net-worth clients with access to competitive lending options.
-Austin Bates, VIP Mortgage
How is the growing demand for private lending evolving, and what advantages does it offer borrowers compared to traditional financing options?
Since the Global Financial Crisis, traditional banks have faced increasing regulations and capital requirements, making it more difficult to provide the financing they once did. Back in early 2023, we experienced additional instability in the banking sector, with a series of regional bank failures. This prompted regulators to reassess the integrity of the financial system and impose stricter capital requirements, further limiting borrowers’ access to certain types of credit.
Private lending markets, however, offer borrowers greater flexibility. Unlike traditional banks which are often slow-moving, highly regulated and bound by rigid credit processes, private lenders provide adaptable financing solutions. While private credit may come at a higher cost due to lenders’ capital structures, many borrowers appreciate the ability to establish direct relationships with their lenders. Nonbank lenders are often more responsive and willing to customize loan structures, making them an attractive alternative for those frustrated by the constraints of legacy banking institutions.
At the same time, investors seeking opportunities beyond public markets have fueled a growing demand for private credit. This alignment of investors searching for alternative yields and borrowers needing non-traditional financing, has driven significant growth in private lending.
Since 2009, Capital Fund has successfully bridged the financing gap for real estate investors, developers and builders. With accessible liquidity, quick closings and a commitment to reliability, we have built a strong reputation as a trusted hard money lender in the markets we serve.
-Chris Catti, Capital Fund 1
What are key differences between a will and a trust, and which is best for business owners or high net worth individuals?
Choosing the right estate plan is extraordinarily important. A will is a legal document that outlines how your assets should be distributed upon your death, but it must go through probate if it is above the Arizona probate limit, which can be a lengthy and public process. Unlike a will, a trust is a legal instrument which, if properly drafted and funded, can bypasses probate, offering privacy, greater control over how and when assets are distributed and other legal protections for its creators and beneficiaries.
For business owners or high-net-worth individuals, a trust is often the preferred option because of its enhanced privacy, flexibility, and protections from potential creditors or legal claims. A living trust, for instance, allows for the seamless transition of business ownership, minimizing disruptions and potential estate taxes. Additionally, it can protect assets from being exposed to probate court proceedings, which can be both public and costly.
Ultimately, the choice between a will and a trust depends on your specific needs, but for those with significant assets or complex estates, a trust provides the greatest security and flexibility.
Attorneys at Kinghorn Law, LLC are licensed to provide legal services in the State of Arizona and may also be licensed in other states. Kinghorn Law, LLC is also a Registered Investment Advisor company located in Arizona and may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements. Information presented is for educational purposes only and is not intended to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.
-Elisabeth A. Ori, Attorney, Kinghorn Law, LLC