If you’re a high net worth client looking for a large mortgage, your choice of lenders is increasing. That’s the view of many leading high value mortgage brokers who have seen a number of lenders enter the ‘large mortgage’ market in recent weeks.
The choice of mortgage deals for professional and high net worth mortgage clients has improved in 2013, with the likes of Scottish Widows Bank and Investec launching large mortgage propositions in the last few days. We examine the large mortgage market and look at why the choice of lenders is increasing.
The Financial Times reports that ‘more banks are launching mortgage ranges targeted for professionals, such as accountants, architects, dentists and lawyers’. Two such schemes – from Investec and Scottish Widows – have been launched in the last few days.
Investec have a scheme aimed at borrowers with a minimum income of £50,000 for qualified professionals and £75,000 for business professionals. The bank will lend up to £2 million and will consider up to 100 per cent of additional income, such as bonuses. There is a loan limit of £1 million for first-time buyers.
“New lenders entering the high value mortgage market will substantially widen the choice available to professional people,” said Islay Robinson, CEO of London mortgage broker Enness Global Mortgages.
“It’s also nice to see that lenders are prepared to consider bonus income as part of their underwriting. Many lenders have been reluctant to accept bonus income over recent years, but, for many high net worth clients, bonuses and commissions are a major feature of their remuneration package,” he added.
The FT reports that ‘Investec’s entry into the market also widens the choice of mortgages for the self-employed. According to the bank, income can be based on the borrower’s most recent year of earnings.’
Other lenders that have entered the large loan market in recent months include Virgin Money, Abbey for Intermediaries and Metro Bank. While mainstream lenders are keen to secure more of the ‘large mortgage’ market, many brokers are frustrated with the lack of underwriting expertise and flexibility at these lenders, despite their claims.
Mr Robinson, the London mortgage advisor, said: “Many lenders like the idea of attracting high value mortgage clients but don’t have the underwriting expertise to fully understand the needs and wants of these clients. I’d much rather approach a lender who specialises in million pound loans than a high street lender dabbling in the market.”
Mr Robinson, the million pound mortgage expert, also warned high value mortgage clients that the pricing offered by many of these newer lenders was uncompetitive. He said: “While many people may be attracted by Investec’s flexible underwriting, their current product range is not at all competitive.
“When I’m recommending a large mortgage to my clients it’s important to balance both service and the overall cost. At the moment there are plenty of lenders with an appetite for large mortgages who offer significantly better terms than those offered by some of these newer high value mortgage lenders.