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Top Tips For Applying For Large Mortgages

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Due to the economic crisis in the past, a lot of lenders avoided offering large mortgage loans. This can be elaborated by stating that lending a vast sum to a single borrower is regarded as more of a risk than spreading the same over quite a few smaller loans. However recently, resilient property costs have persuaded these lenders back into the market of large loans, and thus, buyers searching for mortgages options of more than £1m are finding themselves with more options than they imagined.

But applying for large mortgage loans does not come easy. Keeping in view your situation, there may be a number of aspects which you need to take into account. With that said, let’s discuss some essential information you need to be aware of before you apply for large mortgages.

Be Prepared to Prove Your Income

For people with simpler income streams, this is not much of a problem, but candidates for large mortgages very often have their incomes originated from a number of sources. People with income streams that are complex (for example one’s applying for contractor mortgages) may find that they are not eligible to the finest rates or even that some lenders will reject their submissions.

If your income stream is not considered straightforward, for example, it primarily consists of bonus payments, make sure you are prepared for a longer than usual process to get your application underway.

Your Outgoings

One of the key criteria for large mortgages lenders is affordability — high loan to value ratios or outgoing work as red flags for some lenders who will stop processing your mortgage application. However, some lenders are more flexible. These are usually the ones that have specialist underwriting teams for large mortgages who are equipped to do more to comprehend the circumstances of wealthy clients.

Nonetheless, precisely detailing your outgoings is a clever move irrespective of which lender you are approaching.

Beware Arrangement Fees

You might come across lenders that charge much more fees than typical for arranging large loans. This is especially true for the newer underwriting groups who are making a comeback to the large mortgage market. This amount can sometimes turn into thousands of pounds for arranging loans of £2million or beyond.

How To Get A Mortgage As A Foreign National?

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The UK government wants to help homeowners by smashing the myth that non-UK citizens are ineligible for a mortgage. When you are working and living in the UK and have landed on your dream home, you must be desperate to get your hands on a mortgage. The only thing stopping you from acquiring this dream is not being a British national. The fact is that obtaining a mortgage approval for non-UK citizens, whether it is you or your partner, is less about the country of your birth and more about credit history.

Everyone can become confused at this point, so you are not in this alone. With a massive population of 65 million, some nine million are non-UK citizens. This translates to the fact there are a lot of house-hunters that are foreign-born. However, the number of homeowners among those foreign-born cannot be ignored as well. According to the recent stats, foreign buyers own nearly 10 per cent of UK’s housing properties.

There are a number of things that affect how feasible it is to acquire a mortgage as a foreign national in the UK. However, for a British citizen, nationality shouldn’t be out of the list. The fact of the matter is that the lenders cannot distinguish between EU citizens entirely on the foundation of the country of their birth. So, whether someone was born in Berlin or Bristol, it is not supposed to put you at a disadvantage when trying to obtain a mortgage.  As long as someone has been a resident of Europe for the past three years, possessing a bank account and permanent employment history within the UK is sufficient.

Your credit history, however, is another story and is scrutinised more critically –this could become a hesitant hurdle if you have only later moved to the UK. Possessing an excellent credit rating is indispensable when it comes to acquiring the finest deal or any deal whatsoever. So, one needs to build their credit score up as soon as you land in the UK.

Naturally, the circumstances turn even more complicated for non-EU citizens when they are in search of a mortgage. However, what is important to remember is that it is not impossible.

Tips for a First Time Home Buyer

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People like to believe that purchasing a home is one of the most demanding things you will do in your entire life, especially those who are undertaking this task for the first time. But it should not have to be that way – let us help! Here is a lowdown on the process.

KNOW YOUR BUDGET

To get an idea of what you can manage to pay, engage with a mortgage adviser. This includes enabling a bank, mortgage broker or building society with your financial particulars so they can chalk out how much can be lent to you based on your economic circumstances. You will usually be required to pay a 10% deposit, in addition to a mortgage, which can maximally consist of 4.5x your monthly income or mutual salaries if purchasing is done with another person.

FINDING THE FIRST HOME

Engage the local estate agents, who will have an insight into the market and can arrange an array of viewings in a particular area so you can compare various offers. If someone is purchasing in a relatively unacquainted area, what can help is visiting the property at various times of day along with engaging the locals in acquiring a better understanding as to what the surroundings are like.

BEFORE PUTTING IN AN OFFER

One-bedroom apartments are available in all sizes and shapes, so chalk out the price/square feet and utilise this to relate with other properties to ensure you’re getting the best available value for your circumstances.

Additionally, observe the latest selling prices in the locality you want to purchase on Land Registry to confirm whether you are making the appropriate payment.  A lot of factors will have an influence on the price, from the location of the property to the overall outdoor space.

MAKING AN OFFER

Negotiate for a price that seems to be fair to you is always a good idea. This may equate to the asking price or a little below or above. Keep in mind that both the buyer and the seller can back out, right up until the contracts are exchanged, therefore to reduce the risk of being manipulated, you should ask for the property to be taken off from the market. This involves eliminating the details of the property from all the websites that it had been listed on.

All You Need to Know About The Help to Buy Scheme

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A ‘Help to Buy’ is a government-backed scheme intended to help anyone who is facing a difficult time in acquiring a deposit for their first home or are struggling to move up the property ladder due to constrained equity. The two main elements of the scheme are described below:

Equity Loan

The first part of the ‘Help to Buy’ scheme was established in April 2013 and has its eligibility limits extended up to 2021. Home movers and first-time home buyers can both make use of this scheme. However, the scheme is only applicable to those homes that are newly built.

The advantage of this scheme is that as little as 5% of the property value will be required as deposit by the home buyer. This will be further beefed up by the government by 20% by the Homes and Communities Agencies (HCA). All this combined will raise your deposits to a good 25%, enabling you better mortgage rates form the prospective lenders.

The borrowers have the choice to repay the equity loan at any time they find feasible-they will be charged no penalty whatsoever. You can choose to pay either 10 or 20 per cent of the total amount. This holds in cases where the loan at least is worth 10% of the total value of your home.

Mortgage Guarantee

This element of Help to Buy scheme called the Mortgage Guarantee is intended to grant home movers and first-time buyers a deposit, increasing their chances of securing a better mortgage. The scheme was officially unveiled in October 2013.

This scheme is better understood when referred to as a ‘behind-the-scenes’ kind of arrangement between the government and the lender. This scheme implies that the buyers are required to raise only 5% of the property value, and a further 15% would be added on the part of the government. The building societies and banks are more relaxed while lending larger mortgages since the guarantee comes from the government. These loans bear lower than usual rates that would otherwise be assigned to them.