Whether you’re remortgaging or have found your dream property, if you require a large mortgage, our specialists may be able to help. Small mortgages are of course easier to obtain when compared to large mortgage loans. This isn’t because of income and affordability, but particularly because lenders will limit how much they’ll lend to one person.
The reason lenders tend to cap their loan amounts to borrowers, is to minimise their risk. For instance, one million pounds spread across five individuals at £200,000 each, is a lot less risky than one person having a one million pound mortgage. As capital is spread, so is the risk.
If one out of five borrowers defaults on their mortgage, the lender is exposed to £200,000. On the other hand, if one individual defaults on a mortgage of £1,000,000, the lender risks losing a lot more.
Lenders have varied criteria and if one lender has declined you, it doesn’t mean they all will. Large loan mortgage lenders tend to offer higher maximum mortgage amounts when compared to traditional lenders. Our advisors work closely with specialist lenders and may be able to secure you the large mortgage you need. You can make an enquiry at any time and an advisor will talk you through the process.
Can I get a large mortgage with a small deposit?
Larger deposits are always preferred by lenders. This is because the risk in lending a mortgage with a large deposit is a lot less in comparison to a mortgage with a small deposit. If anything went wrong, then lenders have less to recoup in addition to the property which should cover the loan.
What this means for large mortgage applications is that higher deposits are certainly preferred to smaller deposits. In reality, this is the case for any mortgage, despite the value of it. Lenders will use LTV (Loan to Value) as part of their mortgage assessment. Those with higher deposits are usually offered higher mortgage amounts, along with preferential rates. For instance, the same lender may offer you £350,000 at 90% LTV or £600,000 at 75% LTV. The mortgage at 75% LTV is also likely to have a better rate.
It is possible to secure a large mortgage with a smaller deposit as lenders will also consider income and affordability. As all circumstances vary, it’s impossible to give you a tailored answer without speaking to you. We’ve approved mortgages for millions of pounds with small deposits. Although it may not always be easy to secure a large mortgage, it’s certainly possible.
How is affordability for a large mortgage assessed?
Along with LTV, affordability is also a major player when mortgages are assessed. Big mortgages mean big repayments, so a lender needs to assess whether or not the mortgage you’ve applied for will be affordable. Affordability is based on your income as well as any outstanding loans and expenditures. Lenders need to have the comfort of knowing that you’re financially capable of taking on a large commitment.
For regular mortgage amounts, lenders will usually lend up to 4-5x your annual gross salary. If you’re self-employed, then assessments are typically made on 4-5x your net profit and dividends for directors. If you’re a high earner and require a large mortgage, lenders may lend more than the industry standard of 4-5x your income/profits. In some cases, lenders that specialise in larger mortgages may even lend up to 7x your income.
Using a large mortgage for a development
If you’re looking to finance a property development, a regular mortgage wouldn’t be enough to fund the project. This is because the development has not yet been built. Once development is completely finished, then of course you can remortgage.
Read more: What is development finance?
Specialists in large mortgage loans
If you need a larger than average mortgage but don’t know where to start, you can make an enquiry today. You can also ask our qualified experts a question at any time.
By speaking to a specialist, you can ensure you’re getting the best deal available on the market. Furthermore, our advisors can approach lenders best suited to your circumstances. By doing this, the chances of maximising your mortgage amount can drastically improve. Call us now on 0800 195 0490 or simply make an enquiry below.