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Luxury Mortgage Loans Explained: How High-Net-Worth Buyers Actually Finance Homes

By February 2, 2026Real Estate Pros Show

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Show Summary

In this episode, Dylan Silver welcomes Alan Mack, founder of Mack Financial Services, who brings over 30 years of experience in the mortgage industry, particularly focusing on high net worth individuals. Alan shares insights on the current mortgage landscape, emphasizing the importance of pre-approval for first-time homebuyers and the unique challenges faced by affluent clients seeking loans for luxury properties. He discusses the impact of rising interest rates on the market and how his advisory firm has adapted to meet the needs of clients in the luxury sector, providing tailored solutions that go beyond traditional banking practices.

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    Investor Fuel Show Transcript:

    Alan Mack (00:00)
    You know, that’s a great question. So here’s the challenge. So being an executive with the banks, I’ve been with the big banks, Bank of America, Wells Fargo and Citibank. So if you take my 38 year career, about two and a half decades, were with the big banks as an executive. The problem is this with the big banks is that when you work for a bank, so if I were to turn around and hang my NMLS license, which by the way, I’m not licensed under NMLS with the banks, you’re under FDIC, but you still have a unique identifying number, given the mortgage bank or broker which has to have their NMLS license.

    Dylan Silver (02:01)
    Hey folks, welcome back to the show. Today’s guest, Alan Mack is the founder of Mack Financial Services. He has 30 years in the mortgage space and has guided clients through over one billion in closings. He specializes in high net worth borrowers and provides a client centric solution to transform home financing into reality. He’s been mentioned in both Forbes and Fortune magazines and you can find him at mackfs.com. Alan, thank you so much for taking the time today.

    Alan Mack (02:30)
    Dylan, it’s so nice to be here. Thanks for having me.

    Dylan Silver (02:34)
    When we talk specifically about mortgage, I think there’s so many people right now, especially younger people who are looking at all the new construction that’s going on and are also looking at some level of uncertainty of where things are going to go. And they’re saying, hey, you know, what’s the tools at my disposal is now the best time to buy and then also who do I go to? I’d like to start there and ask you, know, based on all your experience, what’s the first step that folks should take?

    if they may be that newer homeowner.

    Alan Mack (03:05)
    So when you look at the first time home buyer, and you my specialty is the luxury market, right? But we’ll talk about a first time home buyer here, which typically isn’t the luxury market, but a first time home buyer, they definitely want to get pre-approved from an investor or a lender, whether it’s a bank, they’ve got local to them a credit union or a mortgage banker or broker, because when they make that offer, they want to make sure that they’re going to be approved to buy that home. So that’s the first step. Make sure your credit’s good, you know, keep your credit clean.

    ⁓ Try not to have too much credit card debt because that will definitely hurt your FICO score and they’re to use that when they qualify you in the debt-to-income ratio. So I really need pay attention to that. So really it’s important to get pre-approved ahead of time. The rates are going to come down this year. The administration is working really hard with the Federal Reserve to get those rates down and they will come down this year. We’re seeing some headway that way. So it’s going to be, I think, a really busy year this year. One for purchase business.

    and also for refinance business for those that got rates maybe six, seven, eight percent.

    Dylan Silver (04:07)
    You mentioned that your niche is in those high net worth individuals. How did you get into that space, right?

    Alan Mack (04:13)
    That’s a great question. So, you know, I’ve been doing this for 30, it’s coming on 38 years. So I got a mortgage in 1988 and back in the early days worked for Bank of America and then moved on to Wells and some other big companies throughout my career. in 2022 rates were running about let’s say January 22, they’re running about 3%, we’ll say. So it was great for people looking to buy a home rates were low. And all of a sudden in March, 2022, the market took a shift.

    and rates went from 3 % to 5 % to 6 % to 7%, 8.25%. It just killed the market. so, anyone that was doing loans, and I don’t care what company you work for, anyone in the United States, if you’re a mortgage banker or a broker, you felt that pain as that client or that potential buyer felt that pain if they were gonna buy a property with those high interest rates.

    So the market literally came to a standstill.

    And you know, I’ve always been busy and I left Bank of America in March 2020 for my own corporation back in 2020. And I was doing loans through 20 and 21 and then 22. And when the market literally collapsed, I had to think of something different outside the box. And you know, because of my experience in the luxury market, especially I live here in Southern Orange County here in California, median home price about 1.2, 1.3 million median home price. So it’s, I live in the land of luxury we’ll call it. And so.

    I get calls for help and what I realized is that there are a lot of luxury clients out there that really need help in one, structuring, figuring out ⁓ what they can afford to buy along with the fact is which is the right bank for their particular needs. So I created this, ⁓ I’ll call it a paradigm shift and really changed my whole platform and with my firm. really it’s now it’s an advisory firm for the affluent clientele in the luxury market.

    That’s what I focused on, been my experience. Launched it in 2023 and since 2023 I’ve closed over 150 million in closed contracts. Since then, I have some amazing stories. I work with very famous people, sport figures, captains of industry. They come to me for help when they’re looking to purchase a property. Whether it’s a primary, second home investment, anywhere in the United States, my banks are nationwide. But what I did is I created this kind of a niche or a concierge service

    as a financing advisor for that type of.

    Dylan Silver (07:23)
    Now, when we’re talking about these types of deals, mean, this is for me, I’m a fish out of water in this space. you know, it’s interesting because you think, well, OK, these are high net worth individuals. Of course, you know, everything is going to be a seamless process. but there’s, you know, fewer people that they can go to. They have to have subject matter expertise in this area of, you know, higher dollar homes. And then also, you know, the process for for for sourcing those loans as well. You’ve got to have those.

    relationships, what are some of the bottlenecks that folks like this run into when they are trying to get a mortgage of that size?

    Alan Mack (08:00)
    You know, that’s a great question. So here’s the challenge. So being an executive with the banks, I’ve been with the big banks, Bank of America, Wells Fargo and Citibank. So if you take my 38 year career, about two and a half decades, were with the big banks as an executive. The problem is this with the big banks is that when you work for a bank, so if I were to turn around and hang my NMLS license, which by the way, I’m not licensed under NMLS with the banks, you’re under FDIC, but you still have a unique identifying number, given the mortgage bank or broker which has to have their NMLS license.

    in that particular state. ⁓ What I found was in the banks is this. After 2008 when the mortgage meltdown happened, remember that, everyone was panicking and so forth, Wall Street stopped buying jumbo loans. Now what a jumbo loan is for your viewers, it’s anything over the conforming limit. So I think today it’s around $860,000. Call it $1 million and above, making it real simple. Those loans used to be sold on Wall Street before 2008.

    So they would package them and they underwrote to Wall Street. Very much today as you have Fannie Mae Freddie Mac in the conforming space, they’d underwrite. And it doesn’t matter who the bank is or who the investor is or the mortgage bank or broker, it doesn’t matter. They all sell this to Fannie or Freddie. And so they underwrite to those guidelines. The problem is when the banks weren’t able to sell their closed loans to Wall Street, they had a portfolio of those loans. So those loans are kept on the books. So every bank has unique guidelines.

    unique qualifications, unique reserve requirements. I can go on and on and on. So what I did is I created a network of banks and bankers in those banks because I was an executive myself. It’s kind of like we all know each other. So I knew who the top guy is at B of A, Wells, Chase, PNC, name the bank. I knew who the top of the house is. It’s kind of like getting in a circle. I I have almost four decades in this industry. again, I’ve been a top producer. So kind of know each other. And so I’ve learned the guidelines with each one of these banks, know what their niches are.

    and I’m able to take that experience that I have and take that to the client, say, know, let’s look at your overall portfolio. So I look at their real estate they own.

    I look at their assets they have, whether it’s liquid or non-liquid. I check and look at their credit situation, and then I look at their income. Basically, you know, how they’re driving their income. Usually it’s a C Corp, S Corp, or LLC. 95 % of my clients in the digital market are self-employed. And taking all those and kind of packaging all together and saying, okay, based on the home they’re purchasing,

    and what kind of home they’re purchasing, what their goals are. They want to have a higher loan to value, meaning putting less money down. They want to have a lower payment. They want to go interest only. Whatever the case might be, I know the bank to take them to. Because it’s so finite and detailed when you get into that affluent client, everything can change. I mean, literally, if I change just one little item, it’s not the right bank. It’s a different bank. And it can change daily. So it’s so unique in the banking world that their guidelines can literally change daily.

    Their pricing can change daily, multiple times during the day. So I have my finger on the pulse with these banks. I talk to these guys all the time. I do a lot of business with these banks. I bring them in, you know, great relationships with these clients that I bring to the table for these banks. So they literally roll out the red carpet for myself and my client that I work for. So my firm is hired by that client as an advisor, and then I know where to go. And I know the structure put together and I take them to the right bank. And I’ll tell you, I have so many stories I can tell you,

    I mean, many, many, many stories. you know, just this month alone, we able to get a client, a 5 % rate. He was buying a property, 3.9 million at Marine Del Rey. Wanted put as little down as possible. Was trying to put 20 % down, which can be difficult, anything over, say, 2 million or 3 million loan amount. The banks kind of fall off then. And I was able to get him a loan with less money down. We couldn’t go 80 % because one of the banks was requiring a $1 million relationship. So we’d have to move a million dollars of his money.

    to that bank in order to get an 80 % loan, you know, over, you know, three million. And he didn’t have it. Unfortunately, we couldn’t do that. So I had to get creative here. So what I found is I had one of my other banks and came to realize that, you know, his mother that he managed an account for through a trust has a relationship at this particular bank. So I was able to have my banker utilize that relationship. There was his mother’s account, not his account. And we got him a rate of 5%.

    Literally got a half percent off the interest rate on a three million dollar loan. Now if you do the math on that, it saved them $927 per month in a payment. Plus he was able put less money down which equated to that money that he didn’t put in those four walls. You can invest it, say, a CD or money market around, it’s called a 5 % rate. It was another $250 a month in income. Basically it came up to be like $1,150 around there a month in savings. Had he gone to his own bank?

    Dylan Silver (12:57)
    What?

    Alan Mack (13:25)
    He would have paid a lot more. And by the way, had he gone to his own bank, we had some issues behind the scenes with Tidal. It was a cloud on Tidal. And my banker coincidentally had done a loan in the same neighborhood. It was on the coast and had a coastal commission that put some sort of lien on the property and all the properties there. we able to work with Tidal, have it removed, are we able to close that loan? So had it not been for my banker and the bank I took him to, there’s a high probability this loan never would have closed. That’s just one story. I had many, many, many stories. And so, you know,

    Dylan Silver (13:31)
    Yeah.

    I’m familiar with

    a clouded title from working with distress sellers. It’s interesting, because you got bigger problems, but there’s some similarities. For folks who are looking at these luxury homes, does the price point of the home have an even greater impact once you start to get over that $2 million mark? Is every $100,000, is it like, hey, now we need to be looking at a different bank or a different person to be talking to?

    Alan Mack (14:21)
    That’s a great question. So most banks can do loans up to two million. So they’re, they remember because they’re writing the check. It’s coming out of their books, right? They’re writing that check for that. They can do a $2 million loan, but after 2 million, they start dropping off and then their guidelines change. So it may be where you have a bank goes 80 % loan to value on a 3 million. So it’ll be a $2.4 million loan. For instance, you may have another bank only goes 70 % loan to value.

    The problem is is the client doesn’t know this. And once they start the process, usually they’re gonna get referred by the real estate agent that they work with. We’ll say, call my loan officer at Wells Fargo, right? Or whatever, whoever the bank may be. And I’ll tell you, and I’m not joking when I say this, the probability is very high that it’s the wrong bank.

    In many reasons. One, rate may be too high, guidelines are too tight. So they’re not really looking out for the best interest of their client in reality. That’s when I opened up this concierge service, again,

    No one’s gonna beat me. I mean, I could take a bank and you get the best pricing and I’ll find a bank that will beat that bank. I’ll be honest. I mean, it’s like, know, so a client is gonna walk into their local bank. And by the way, 75 % of the business that’s done in the mortgage industry in the banking world are done through Bank of America, Wells Fargo and Chase. They’re the three biggest, right? The big box banks. But they cater to the masses. They don’t really cater to that affluent client. I mean, just straight with your audience. that?

    You know some banks like I have one of my banks that called lender to the stars I mean they do a lot of Hollywood, you know with this director producers actors a list and so forth It’s probably one of the best banks and that’s where I take a lot of my high high-end clients to Where they’ve been negotiating some crazy stuff. I got one right now. I’ve got this week It’s a 25 million dollar 25 to 30 million dollar property in Bel Air. It’s an investment property I’m bringing about 136,000 a month in income

    And you’ve got to get creative on it on the purchase. long story short of this whole thing, we’re to do a $15.5 million investment loan on this property where most lenders won’t touch an investment loan. First of all, because they don’t like it, they like primary or second home. They fall off really fast when you go into investment. And a of the banks only max out a million dollars. Like for instance, I’ll give you US bank as an example. Their max loan amount on investment.

    Dylan Silver (17:19)
    What?

    Alan Mack (17:22)
    you know, an exception, maybe go two million, but it’s around a million. mean, they, know, with most of these banks, again, they don’t like investment property. So taking that situation, this particular client, I knew which bank to take into and we’re going to build a relationship. And the funny thing was this, these, ⁓ this particular individual, his company’s worth about $60 million. ⁓ and it drives a lot of volume and so forth. And so they were looking at leaving Wells Fargo. They kind of outgrown them.

    which you typically do when you start making a lot more money. And I got them set up with this bank behind the scenes. Got the whole team coming together for this particular client. Nevermind helping them with the financing on buying this property, but taking care of their relationship for their business, personal or everything else you can include. literally the bank rolls out the carpet for you. And that’s what I created this concierge service. And I’m telling you, it’s unbelievable. Never thought it would just take off like it did.

    Dylan Silver (18:02)
    Right, right.

    For these banks that are, you mentioned, lender to the stars, of course, they have to hedge their risk. What type of ⁓ foreclosure rate or default rate would you see in this ultra high net worth space? Because of course, things can happen to anybody. So what’s their level of risk tolerance when you’re dealing with that pool?

    Alan Mack (18:40)
    That’s a question again, too. It’s very, very low. Typically you find, because remember you’re dealing with a high end client, right? First of all, who’s got, you know, they’ve got reserves. Now don’t get me wrong. I have one client I was helping, young guy, won’t mention his name, it’s very famous, but in his thirties and a billionaire and lost, I’m going to say everything, but he, became not a multimillionaire and he came out millionaire, you know, from a billionaire. So, had some travesty, had a house burned down in Palos Verdes, I’m just kidding, with the,

    fires, had a hundred million dollar home and lost it and you had minimal insurance on it. So, you know, not Palos Verdes, I take that back, Palisades, the Palisades. And the unfortunate side is, that, you know, things can happen, but the foreclosure rate on the luxury market is very, very low because again, they have equity. They’ll have anywhere between 20, 30, 40 % equity in that property.

    There’s no problem on turning that property and getting it sold. They have plenty of equity there. Now mind you, if it was a first time home buyer, they come in with 3 % down, 5 % down. You’re gonna have a higher foreclosure rate, we’ll call it, because there’s less money down from that particular consumer that’s buying that property.

    Dylan Silver (19:52)
    in

    the game. Yeah. I mean, you mentioned something about investment properties, and I want to touch on that. are there folks that are using these high-end properties, not as a residence for themselves, but as an investment property? And what would be the use case for that? Would that be like some type of rental?

    Alan Mack (20:10)
    When they buy investment property a lot of times they’ll do it. They’ll put in LLC which some of my banks allow LLC They put an LLC. They’ll run like a business So if you think of it this way, it’s kind of like investing in a business, right? So if I were to put money in a business Buying a business for two million dollars. I put my money down for the down payment I get a finance right if income coming in same type of thing So when you look in the luxury market, you know these rents, you know, they can they’re pretty steep Like I said, got one right now working on 136,000 month for rent

    And so, you know, they look at it as a business in that end, different from when you look at the conforming world on investment. You know, your margins are much smaller and tighter because of the rent you’re getting, But in the luxury market, I’m telling you, it’s it’s unbelievable. But there’s an opportunity, like I said, for investors that want to buy investment property, what I always recommend is put it in LLC and run it like a business.

    Dylan Silver (20:45)
    Right, right.

    Now, for these folks who are renting out these ⁓ superlux homes, are these themselves folks typically with a real estate background or are they folks who may like the area and see it as a potential new business for them to get into?

    Alan Mack (21:21)
    I have both. So I have some that, you know, they have their, ⁓ not so much a broker, they’re just very experienced in purchasing properties and you know, whether it’s a flip or they purchased to keep. So they’re really experienced, but you know, I wouldn’t say that there’s any type of challenge or issue there with them on buying an investment property. It’s just making sure that they get the right bank when they buy that investment property. Cause I’m telling you, they’ll never know until they start that process.

    Dylan Silver (21:48)
    Yeah.

    Alan Mack (21:48)
    And they’re into it and go, sorry, you don’t qualify. And when you tell someone that is affluent, that they can’t qualify, I’m telling you what, because I get them on the back end after some bank will turn them down, they call me they get my name and number. And they’ll tell me, they’re so upset. Like, how could they say, no, I could pay cash for this house? I know you can, but you got to qualify. And they have slicker guidelines.

    Dylan Silver (22:08)
    Yeah, I mean, it’s almost

    like we don’t qualify is what the bank should be saying. Hey, we don’t have the money to get this done. It’s not a good thing, you know, it’s interesting because again, to draw the parallels again, totally different, different area.

    Alan Mack (22:12)
    Yes.

    Dylan Silver (22:21)
    I worked with and still work with many folks who are first time buyers and you bring them to the wrong lender and they’ll say, yeah, you’re not qualified. When in actuality, they don’t have the manpower or they don’t have the desire to be helping folks in that segment. And of course, when I’m licensed in Texas, there’s all types of programs for those people, not to mention all the incentives that builders have. it’s exactly right. Like you could be thinking, hey, I’m gonna go to such and such bank because this is what I’ve been banking with this whole time personally.

    only to find out like, I just wasted, you know, a month, two months of my time when I was talking to a completely wrong person.

    Alan Mack (22:58)
    And again, going back, being an executive with the banks, the banks hire, most of them hire very inexperienced loan officers. They’ll get them out of college, they’ll get them from maybe they were selling cars, they were doing something else and they want to get into finance, right? So they go to work for a bank, the bank pays them a salary, they give them a little bonus override, but most of them are very, inexperienced. They’re depending on an underwriter to make a decision for them, they’re depending on a processor to tell them what they get.

    You know, in the world of luxury, my clients are very, very, very complicated. They all are. Trust me, they all are. I’ve had a client with a 5,000 page tax return. And by the way, you know, one of the banks, I’ll mention the Big Box Bank, but they were mentioned before, one of them, turned this client down because they said he couldn’t qualify. And when I say they were a livid, they were livid. They were worth, I think it was over 50 million, at least with their company.

    They got turned down. were buying a $13.3 million property, second home down in Southern Orange County. And it came to me and my banker who was probably the number one in the nation, funds about 30 or 50 million a month in business. He’s unbelievable. One of my best banks. And he was able to find income on page, I think it was 480. Seriously, 480. Found like two and a half million dollars in income. Problem was the other bank, you know, and not knocking underwriters because again, I was a banker.

    Dylan Silver (24:02)
    Yeah.

    Alan Mack (24:25)
    I’ve worked with these underwriters. I underwriting experience, by the way, on top of that, the boot. ⁓ You know, it’s like many of them are very, very inexperienced, I’m gonna tell you right now. And they depend on a senior underwriter or someone at the top level to make that decision. But when you work in this market I work in, the underwriters have to be very, very, experienced. If you do $2 million loan, you can have pretty much any underwriter to do that, right? When you get like a $5 million or $10 million or $20 million home loan, you have to have someone with so much experience, because we’re looking at other things besides the things you think of.

    in the conforming world, right? With W-2s, pay stubs, bank statements, you know, kind of fit the credit, you know. In the world where I’m in, I can use cash flow analysis, asset depletion. Like for instance, I had a client that had 20, sold his company, 70 years old, had $28 million payout on his company. Starts new company. They’re moving forward to do an IPO. He’s eight months into it. Of course, you can’t use that income, as you know, because he’s new on his new company. And he was buying a $7.1 million home in Balboa, right by new.

    Dylan Silver (24:57)
    Right, right.

    Alan Mack (25:25)
    And the problem was he said he was going to pay cash and he had all his money invested in stock and it was making money. And he came to me and he says, Alan, I need your help. I got referred to me and he said, ⁓ I want to put down as little as possible. Otherwise I have to liquidate that stock. I got to pay capital gains on that stock and I can take that asset that I’m making money on and stick it in those four walls. Doesn’t make me money anymore. Please help me. It’s no problem. So hook them up my bank.

    Banker starts the process calls me I’m said we got a problem like what’s wrong goes. He got a 681 fight though I said what now in the world of jumbo again or our luxury typically banks want to see a minimum of 700 FICO score and if you get it higher and stuff 720 FICO score and so I do have banks will get on a 680 FICO score that’s the lowest that’s the lowest threshold for the banking world in the luxury market and They did an exception in this case. So we were able to get creative So it took him from going as an 80 % loan which we’re gonna do an exception on he thought his bike was 780

    not 680. So instead of putting 20 % down, he’s got to put 35 % down now. That’s an extra million $50,000 that he would have to come up with, right, to close the escrow. And so he’s begging, Ellen, please, can you come up with something? And what it was, he had a rolling credit card, had no clue about it. He had identity theft a while back. There was a credit card that no one caught and was rolling late every single month. That’s why his FICO was so low. So what we did is we got very creative. We did a first

    Dylan Silver (26:30)
    Right.

    Alan Mack (26:53)
    loan to value for that property at 65 % and we want to make up any way we could the difference without him liquidating stock and coming with more money for the down payment. So what we did is we moved some of that money over. So we took some of that stock he had invested. He filled out what’s called an ACAT form. Fills out that ACAT form. He’s able to change the custodian of part of the stocks he’s got, moves it over to the new bank as the new custodian.

    We had to move over $3 million. We got a line of credit against it at 5.75 % interest only, no fees. Against the 3 million, got an extra 1.5 million. He came in with 14 % down to close that escrow. 14 % down with a 681 FICO score. And remember his goal was put as little down as possible. So nevermind did I meet his goal, I exceeded the goal. that’s, I have story, I have so many stories. Again, I’ve closed over 150 million so far. Got a lot of stories to tell.

    Dylan Silver (27:46)
    Yeah.

    Alan Mack (27:50)
    But it makes me feel good because again, it’s kind of like when something comes my way, complicated, I put on my hat and I go, okay, I start figuring all out. And once I sit down with that client and figure out, let’s go over your real estate you own, let’s go over the assets you own, credit, income, forth. And here’s the thing, I have banks that look at assets differently. And so in one of my banks, what we can do is we can convert that asset into actual income. Not giving them interest income, we’ll call it, where let’s say they have a million dollars.

    at 5%, they’re gonna get 50,000 in income. No, no, we’re talking, you know, I can convert that into 30,000 a month in income because they look at it differently. So it’s like, it’s basically an asset depletion. We do cashflow analysis. There’s a lot of different ways that you can get creative to get someone into a property where if they were going the standard walk in the bank, talk to the loan officer, they’re gonna go the route as everybody else and they’re almost like they’re get declined or they’re gonna hit some headway.

    Dylan Silver (28:40)
    never have.

    We are coming up on time here, Alan. Where can folks go if they may be looking at ⁓ Ultra Lux homes in Southern California? How can folks reach out to you and your team?

    Alan Mack (28:58)
    So they can reach out any time, I’m available and again, my email address is alan at mackfs.com, that’s A-L-A-N at M-A-C-K-F-S.com. Email me any time. Call me, you’ll find in most cases I pick up my phone probably nine times out of 10. I built my whole career on service. My phone number is 949-929-1091. And again, I’m here to help. If you got any questions, I’m a free phone call.

    And if I can help you in any way, I’m gonna do my best.

    Dylan Silver (29:31)
    Thank you for taking the time today. Thanks for coming on the show.

    Alan Mack (29:33)
    Dylan,

    thanks for having me on the show.

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