In This Article
What are large mortgage loans?
A large mortgage loan is subjective as different lenders will have their own idea about what is considered to be a large loan.
However, an expected lending amount that constitutes a large loan is £1,000,000.
With some lenders, when lending goes beyond £1,000,000, this can mean that it goes to a different underwriting team or that more checks are required during the underwriting process.
This will, however, depend upon the lender and how they do things.
It may be that the lender needs to see more documents around your company’s income, or for your employment, the loan is larger than usual.
The sustainability of income may be considered if there is a strong chance of income reducing during the mortgage term.
For instance, if a large mortgage loan was being lent to a professional footballer aged 30, earning £500,000 per annum, but it was likely that this income would reduce shortly, the lender may be concerned.
Lenders need a clear idea of what you plan to do to earn money so they can feel confident that you can continue paying your mortgage.
In this scenario, it may be that the footballer plans to go on to coach. If so, the lender may want to know how much income this would likely generate.
It would help if you talked to a mortgage advisor about your current income and what is expected in the future so they can make a recommendation accordingly.
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Do all lenders offer large mortgage loans?
Most large loan lenders will offer large mortgage loans to some extent but differ in terms of the maximum loans they can consider.
For instance, £1,000,000 may be the maximum amount a person can borrow up to with some lenders, considering this to be a very large loan, with others lending mortgages up to £5,000,000 or more, as long as the application is affordable to the applicants.
Mortgage Advisors can tell you which lenders are available depending on the amount of money you need to borrow.
The lending you qualify for will depend on your income, outgoings, dependents, age, deposit, credit file and more.
You can sign up for a free trial at Check My File to know more about your credit history.
Do first time buyers qualify for large mortgage loans?
First time buyers can qualify for large mortgage loans like any other buyer.
For example, if you have a first time buyer that has a large enough income to get the loan amount that they need and meets the criteria of the lender, there is no reason why they will not get a large mortgage loan.
First-time buyers may have smaller deposits than people buying for the second or third time as they have not been able to build up equity within a property.
A smaller deposit can result in a lower mortgage capacity due to loan to value differences affecting a lender’s income multiple calculations.
However, suppose a first-time buyer’s house with the correct deposit is needed to qualify for the mortgage, with a large income and affordable outgoings. In that case, they should be able to qualify for a large mortgage loan like any other borrower.
Your mortgage advisor will need to understand your entire situation to know which lender you qualify for and how much you may be able to borrow.
Professional advice is strongly recommended when taking a mortgage of any kind, so when taking a large mortgage, it is essential due to the cost of the interest over the term of the mortgage.
Large mortgage loans for buy to let properties
It is possible to get large mortgage loans for buy to let properties.
A large mortgage loan on a buy to let property will be based upon the value of the property and the amount of rent the property generates.
It is possible to get buy to let mortgages over £1,000,000, as long as the property and the lender meet the criteria needed.
A property with a high value should also attract a high amount of rent.
Along with the property value, the property’s rental amount determines how much a buy to let lender will lend.
Lenders refer to this calculation as their stress test.
Different lenders use different stress tests, meaning that a certain amount of rent can result in different maximum loan amounts across other lenders.
Some buy to let lenders also work on personal affordability to calculate how much they can lend to you.
In this instance, a high personal income would be needed to get a large mortgage loan on a buy to let property.
As the buy to let mortgage market is large and complex, finding an experienced mortgage advisor is always worthwhile.
They will be able to take complete details of your situation, the property value and the amount of rental income you expected to generate.
With this information, they can look into which lenders may be able to lend to you and what would be the most suitable product.
If you would like I NEED ADVICE to match you with a mortgage advisor with experience in large mortgage loans and buy to let mortgages, please complete the contact form.
Are there more fees involved with a large mortgage loan?
With some lenders, there may be higher fees due to the large mortgage borrowing.
This is not the case with all lenders, as some charge a flat fee on their products, a typical amount being £995, which can usually be added to the balance (this results in interest being paid on this lending too).
However, some mortgage lenders charge a percentage-based fee on their products, which usually makes them more expensive with larger loans.
For instance, if the lender charges a 1.5% fee for their products, and the loan amount is £1,000,000, this would result in a £15,000 product fee on this lending.
Always make sure that you understand the rates and the fees involved with a mortgage product before going ahead.
Mortgage Advisors may also charge more for large mortgage loans, which may be linked to the complexity of the scenario.
Make sure you know how much your mortgage advisor charges before allowing them to undertake any chargeable work.
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Do you need a specialist mortgage broker for large mortgage lending?
You do not necessarily always need a specialist mortgage broker for a large mortgage loan. However, experience is always an important thing to consider when searching for a mortgage broker.
If you are looking for a large mortgage loan, you may need a specialist lender due to a complex income.
If this is the case, you want your mortgage broker to have arranged similar mortgages in the past and who is familiar with these lenders and has experience in mortgage finance.
It will help if you ask your mortgage advisor what experience they have in arranging large mortgage loans to ensure they can assist you with your situation.
Most lenders can consider large mortgage loans but will have a different idea of what this means.
Different lenders’ maximum loan thresholds will vary, and so will their lending criteria determining what it takes to qualify for a mortgage with them.
If you are considering a large mortgage loan, you should talk to a mortgage advisor with the correct background to be able to assist you in your individual situation.
If you would like I NEED ADVICE to match you with a mortgage advisor with experience in large mortgage loans, please complete the contact form.