In the UK, the majority of high street lenders provide mortgages of up to £1 million, with a few extending to £2 million. With house prices rising throughout the country, you may need to obtain a larger mortgage loan to purchase your dream home or go down the route of refinancing your existing home loan.
There are several factors to take into account which can be the difference between securing a large mortgage loan and falling at the first hurdle, so here are some things you can do to boost your borrowing power.
Understandably, the higher your income, the more chance you have of obtaining a large mortgage loan. All lenders will delve into your earnings to determine whether you can realistically afford their repayments. On top of your salary, you may be able to use other forms of reliable income to get a large mortgage loan, such as income from a rental home, dividends, or from investments, as well as money earned from a second jobs or other part-time work. As part of a mortgage application, the affordability check is one of the most crucial aspects.
In all cases it is worthwhile getting full and informed advice up front from a mortgage broker before proceeding with any application.
Boost Your Credit Score
A higher credit score can not only help you get a lower interest rate, but in many cases, a larger mortgage loan. While the exact score will vary depending on the lander, the higher your credit score is, the more chance you have of getting the mortgage you desire. Before looking into large mortgage loans, there are several things you can do to boost your credit score, such as ensuring you make all payments on time, as well as not maxing all the credit you already have.
Your Debt-to-Income Ratio
When applying for a large mortgage loan, lenders will examine your DTI (debt-to-income ratio). In simple terms, a DTI compares the total amount of money you owe each month to the total sum you earn. In general, a DTI of roughly 35 percent or below is deemed good.
Contact Private Banks
Many home buyers find that traditional high-street mortgage lenders are incredibly conservative about loaning on homes valued at £1 million or higher. As a result, more and more homebuyers are turning towards private banks, especially as such lenders are willing to offer higher loans on higher valued properties. Unlike traditional building societies and high street banks private banks are more flexible and can tailor loans to your individual needs.
Whether you want to live in a bustling city, settle in a quaint village, or escape to the countryside, expect a higher price tag in sought-after locations. All the tips above can help in securing a large mortgage loan for your dream property.
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