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 IncomeFor 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 OutgoingsOne 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 FeesYou 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.