Applying for a large mortgage loan is not dissimilar to applying for a standard mortgage but there is often more flexibility with the lenders in terms of what you can borrow. However, it also means there might be more hurdles to jump through. But if you do need to apply for a mortgage over £500,000 there are plenty of things you can do to boost your chances of being successful.
We’ve put together a few key things you can do to make your application for a large mortgage loan run smoothly.
Paperwork is key
All lenders will ask you for the same information but particularly if you’re looking for a large mortgage loan, you’ll need to make sure all your paperwork is in perfect order. If you are based overseas or coming to work in the UK, lenders will want to know the source of your wealth. Where does your income come from? How will you pay back any loan? Can they be sure of the provenance of any money? Any lender will want to make sure they are compliant which means checking any funds come from a legitimate source.
Lenders will carry out various financial checks as well as google you to see what information is available online. The more you can provide them with from the start, the quicker and more successful your application will be.
It’s also worth making sure your electronic footprint reflects what you want a lender to see. It may not be a strict criteria for a large mortgage loan but making sure any social profiles are professional and information on the internet reflects your business or work can be beneficial.
Make sure you talk to the right bank
Not all lenders are created equal and some will only offer certain services. You don’t want to waste time talking to a bank who simply cannot ultimately offer the service you require so getting advice from a specialist mortgage broker is vital. For example, we were able to help a South African client looking for a buy-to-let property – he had previously been talking to three banks but none was able to help because they only offered regulated loans.
Don’t dismiss high street banks
There is much more choice available for large mortgage loans now – you’re not confined to private banks any more. Many of the high street banks will now offer large mortgage loans of up to £5m on very competitive terms. For example, Barclays is currently offering a 1.18% tracker for mortgages between £500,000 and £2m.
Rome wasn’t built in a day and neither was a large mortgage application. Some private banks can take up to eight weeks to process your application so it’s always advisable to get your mortgage pre-approved before you go house hunting. It can be a real problem if you find a house and agree a sale, then your lender declines your application.
Get a mortgage, then hunt for your dream home.
Get some assets under management with your lender
Private banks will consider you far more favourably if you agree to give them some assets under management rather than just apply for a mortgage alone. For example, if you apply for a mortgage, putting £250,000 in a bank account with the lender can lead to far more favourable mortgage rates and indeed getting approval in the first place.
It’s not just cash that counts as an asset in these circumstances – pensions and charges on other assets can also be used as well. UBS insists on having at least £1m under management before it will offer a mortgage.
Make sure you have proof of income
With any mortgage application you need to have proof of income – this is even more important if you are coming from overseas. Having your income verified by one of the “Big Four” accountancy firms – KPMG, PwC, Deloitte or Ernst & Young – will dramatically increase your chances of approval. Banks generally won’t accept it if audited by a local accountant.