Borrowers are spoilt for choice when it comes to getting a mortgage. With a wide range of products available at competitive rates. But if you want a large loan – for the purposes of this article we are talking anything above £1m – it is worth consulting a mortgage broker. While some high-street lenders will lend up to £5m or even £10m. The majority have a cut-off point of around £2m and prefer dealing with smaller mortgages. Because they are regarded as being lower risk.
High-net-worth individuals who are employed and in receipt of bonuses. Who run their own business and are paid via dividends and have retained profits, or contractors with high day rates. May require a more tailored large loan than a standard off-the-shelf mortgage. A whole-of-market broker, such as AWS Private Finance, will be able to point you in the right direction. When it comes to getting a large loan, which may be from a high-street lender or a private bank.
We have excellent relationships with all the high-street lenders as well as the private banks, so will know the best solution for your particular circumstances. We also have access to the underwriters who make the lending decisions so can put your case forwards in a way in which you could not do if you applied directly to the lender.
The private banks have more sophisticated underwriting, often tailoring the product and rate to fit the individual. There is no box-ticking with a private bank; they really get to know the borrower and want to develop a relationship that goes beyond simply lending. This many require you transferring assets under management (AUM) to them, although not all private banks insist upon this.
Lombard Lending may also be an option, where a loan is backed by assets or collateral, such as stocks and shares or certain life insurance policies with a surrender value that can be liquidated easily. A Lombard loan enables you to borrow against these assets; if you fail to make the repayments, the lender can sell them to cover the shortfall. This type of lending is lower risk to the lender, which means attractive rates of interest are usually available. However, borrowers must watch out because if the value of their securities drops, they may be asked to ‘top up’ these assets and will need funds available to do so.
If you are a high-net-worth individual and would like to find out more about large loans, please get in touch with AWS Private Finance to see how we can help you.