Large Mortgage Loan
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Large Mortgage Loan
All about large mortgage loans with Scott West.
What is the biggest mortgage loan that I can get?
There isn’t really a cap – it could be tens of millions into the hundreds of millions. Most people asking this question are probably referring to Loan to Value, and that depends whether it’s residential property or it’s an investment.
With the residential side you can go to 90% or 95% depending on lenders’ criteria and whether you’re First Time Buyers. On the investment side you’ll be at around 75% Loan to Value. If the property value is £400,000, for example, that’s a £300,000 loan and a £100,000 deposit.
With large mortgage loans, most lenders tend to have product caps at £1 million, although a few go to £1.5 million. If you’re looking for loans bigger than that you will need to go to a specialist.
The primary reason is that if you’re looking for a £2 million loan, the asset you’re lending against is very large. So the salability of the asset becomes a risk factor for a lender to consider.
A £200,000 house will sell really quickly because lots of people can afford it. But not a huge amount of people can afford a £2 million home. Most high street lenders usually won’t consider those assets, so you need to go to private banks and other specialist lenders.
Who is eligible for a large mortgage loan and do many lenders offer them?
Essentially everybody is eligible for them, but with larger loans it’s likely that you’re fairly wealthy. You probably haven’t just got this asset. You’ve probably got cars, pensions, cash and high income.
That opens up more lenders to you in the first place and some will start looking at your overall family wealth which makes things more interesting and cheaper.
In terms of the lenders offering large mortgage loans, there’s not a huge number in the Buy to Let world. But if you’re looking at large loans over £1.5 million you probably already know a handful of lenders that are appropriate for you.
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How can I get a large mortgage?
This is where we come in. Packaging a case and presenting the client to the bank is a really key part of this, because the bank will usually want to look at your overall wealth position.
That is a really strong indicator and a really strong comfort point for a lender.
If you’ve got large savings in the bank, high income and other assets, they can look at the whole picture. They’re more likely to give you favourable rates because they will be interested in getting a wider relationship with you. With the right broker it’s fairly easy.
What criteria do I need to meet for a large mortgage loan?
As long as you’ve got the standard elements: clean credit, standard income and a standard property, it will be fine. If one of those three things starts to go off-piste we have to negotiate a different structure to the loan.
Clean credit is a primary point for most of the lenders we will be dealing with. But if you’ve got exceptionally high wealth, most challenges can be mitigated or considered in a different light.
Can I get a large loan if I’m self-employed or a limited company director?
Yes, you can. If you’re self-employed or you run a limited company that generates income outside of property, that’s absolutely fine. We can use those incomes. We’ll look at the accounts and your profitability. You don’t need to be drawing the income. Most lenders are clever enough these days to look at the accounts and recognise retained profits or ongoing, long term profitability.
If you’re buying and letting property through a company as your source of income, it’s the same thing. Rental income can be used as your source of wealth to support the loan.
Can I get a large mortgage loan with bad credit?
You can. There are always concessions to make for that, depending how bad your credit is. If you’ve got defaults on mortgages, cars, personal loans or credit cards it’s going to be more difficult.
But if you’ve got a blip where you’ve missed something and it was a genuine mistake, a one-off, there’s a lot that can be done by discussing the details with a mortgage underwriter.
How can Propertyze help?
A broker will help with the structuring of the loan, which is a really key point because if you’re looking at large mortgage loans, it’s not a simple transaction. Positioning that case is crucial. The client’s overall position is key to the rates and the product they will be offered.
A broker is key to making sure that you get the best deal. We might be able to offer you solutions you didn’t even realise you were eligible for. If you have other wealth in the background, for example, by offering this up to the lender as security – or just giving them visibility of those things – we can begin to structure very creative loan solutions.
Your investments elsewhere could become part of the transaction, for example, and the loan becomes a much smaller part of the whole case.
Your home may be repossessed if you do not keep up with your mortgage repayments.
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