If you require a large mortgage of any amount from £500,000 to £5,000,000 plus it can be sometimes difficult to find a lender that will help. The reasons for this can be complicated and might be based on the lender’s affordability criteria, how they will assess your income or the loan to value that they are prepared to go up to. It could just be that the lender simply won’t lend more than £1,000,000 in one application.
Mortgage lenders can be more cautious in the high-end property market because of the increased risk they face. For example, if the lender needed to repossess and sell a property worth £250,000 then the market for that property is much bigger than a property worth £6,000,000. In addition, relatively smaller mortgages spread the lenders risks further.
If you have been declined by a lender do not despair as every single mortgage company has its own set of criteria. It might just be that you were looking in the wrong place. In addition to the regular high street banks, it is worth comparing the many smaller building societies and specialist lending companies that might be much more flexible with your situation. Please get in touch today so we can help you do this.
When looking at large mortgage loans several elements will have a dramatic impact on the lenders available, a few typical factors are below:
- The total size of the mortgage required. In general, the larger the mortgage loan the more specialised it will become. That doesn’t mean that larger loans will be declined, it just means you need to have more knowledge of where to look. The advisors at Community Mortgage Services have lots of experience dealing with specialist mortgages and can help with most situations.
- The loan to value of the mortgage. In general, the lower the loan to value the more options that will be available. For example, buying a £10,000,000 property with a £5,000,000 deposit will be much more likely and on more favourable terms than trying to do it with a 10% deposit.
- The size of any housing portfolio (if any) the applicant has. This is a complex factor as the impact will depend on the level of indebtedness on the portfolio and the lenders view on its sustainability.
- The source and type of income the applicants have. In general, the more income someone earns the more complex its sources can be. It could be a mixture of UK based income and overseas income, or a mixture between self-employed, employed and property generated. Ensuring any lender has a thorough understanding of your income is important but it is also as important to ensure the correct person at the lender is spoken to, to get that understanding. On many occasions by speaking to the right person we have been able to help clients that ordinarily would have been turned down by customer facing staff.
Due to all the above, it is often sensible to seek the help of a professional mortgage broker who can help you locate the right mortgage for you. So, if you are looking to purchase that dream property get in touch and see how we can help. In addition, we do not charge any fees for helping you.