Million Pound Mortgage

Can I get a million pound mortgage if I have bad credit?

Yes. You won’t be shocked to learn that people who are now very successful weren’t always successful – or didn’t get it right the first time. A lot of billionaires have four or five failed businesses in their past.

If your bad credit happened a while ago or was a one-off event, it won’t be a showstopper. If it’s very recent and it’s an ongoing issue, that’s more of a problem. If there was a clearly defined event you can explain, we can normally find a way around it.

It goes back again to the high street versus private bank proposition. High street banks are credit score led, so it might be tougher. Private banks obviously do a credit check, but don’t credit score. They’ll look at what’s on your credit file and take a view on the level of risk. They might be happy to have you as a client, but the rate would be a bit more.

How does the remortgaging process work in this case?

It’s exactly the same process whether you’re remortgaging or buying. The underwriting is the same, so you still have to jump through all the different hoops.

The exception to this is to stick with your existing lender and take a product transfer. As long as you’ve made all your mortgage payments on time, your existing lender will offer you a new product without any underwriting.

This can be helpful if there are nuances around your situation. You might have sold a business and not have any income currently, or you’re between roles – I see a lot of execs take time out between jobs. A product transfer can be a good option if it’s difficult to do a traditional remortgage.

What fees are there on a million pound mortgage?

It wildly varies. Some loans have no fees whatsoever and in the larger loan space, there will be larger fees. For example, on the high street most banks offer free surveys, while private banks insist you pay for the survey. The arrangement fees could be a percentage, not fixed.

On the high street, you might pay £999 or £1,499. Private banks might charge anywhere from 0.5% to 2% of the loan. The fees are heavier, but often a higher fee means a lower rate, which could work for you. Bespoke pricing is not as simple as going on a comparison site.

I always calculate the total cost. For example, if it’s a five-year facility, what’s the interest, plus fees, plus charges? I don’t look at the fees in isolation.

Do mortgage lenders accept income from commission and bonuses?

Yes – it’s far more common. Many lenders are more liberal with larger loans. Traditionally high street banks get nervous if a commission, bonus or any variable amount of your income exceeds your basic salary. You might get a very large annual bonus, which can be more complicated on affordability.

A bank might recognise that big bonus, but will want to know how you live the other 11 months of the year. But for a million pound mortgage, it’s absolutely accepted. It does vary within the different banks and how they factor it in – some are more generous than others.

For example, some take a two year average and include all of the income, while others only take half the variable income. Ultimately, it comes down to how much you’re looking to borrow. If it’s a modest amount, lender choice is less important. If we need to maximise your income, it’s crucial.

Will mortgage lenders accept income paid in a foreign currency?

It varies. The same positive applies to bonuses, and foreign income is far more common in this area. It typically applies to people working for a big, international company.

Bonuses are normally nominated from the head office. If you work for Google or Amazon, for example, your bonus might be paid in dollars. Other people could be paid in euros.

Another one that trips people up is vesting stock. A recent client said that they earned a million pounds a year – half in dollars, half in sterling. But within the dollar side, some was cash and some was stock. His own bank wouldn’t include any of the vesting stock – so we found a lender who would include it.

That’s quite specific to this space. People talk about bonuses but some don’t make the distinction between cash and stock. In the mortgage world, that’s a very important difference – because not all banks take stock.

You’ve demonstrated throughout the episode how a mortgage broker can help – anything else you’d like to add?

The thing that jumps out to me for clients in this space is the time saving. That’s how brokers help. Yes, you could go up and down the high street or compare online – but that’s time out of your day. If you’re looking to borrow more than £1 million, I’m guessing you’re fairly busy.

Time-saving, doing the donkey work, getting all the prep done and meeting at times and places that are convenient to you are all massive factors. We won’t drag you down to a branch at an inconvenient time. I’ll absolutely work around you.

In this space, we also get lots of exclusive products and lenders. We have access to high value teams that don’t open their doors to the public and, because high value lending is fairly risky, banks like to work with people they know.

The advice side is invaluable too. We recommend how to structure a loan – interest only, repayment, fixed, variable… with a focus on the monthly payments. Even if you go to the right bank, the wrong product could cost you far more than necessary. This is probably the single biggest benefit of working with a broker.

Key Takeaways:

• Million-pound mortgages are offered by both high street lenders and private banks; private banks provide a more bespoke approach, often featuring interest-only terms and considering a client’s overall assets.
• Qualification is based on affordability, income, and assets, with private banks tending to look at the overall credit file rather than being credit score-led.
• Lenders for large loans are typically more liberal in accepting income from variable sources such as commission, bonuses, and foreign currency, though acceptance of vesting stock varies.
• Pricing is bespoke, and arrangement fees are often percentage-based (0.5% to 2%) rather than fixed, making it crucial to calculate the total cost over the facility term.
• Working with a mortgage broker is highly valuable for saving time, gaining access to exclusive products and ensuring the loan is structured correctly to achieve the right value.
  
  

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