One of the problems most often faced by clients seeking large mortgages is the issue of loan to value (LTV). Even if you have a large deposit, most lenders do not like to offer over 65% LTV on mortgages over £1million, as this is considered too much of a risk.
This can be offset by placing assets under management (AUM), something many private banks will require.
However, I recently worked with a client who was looking for 70% LTV for the purchase of his new main residence, but did not want to place AUM. A UK national and British passport holder, I have a longstanding relationship with the client and have assisted him with his financing requirements in the past. He was now looking to purchase a £6million residential property in London.
However, requiring such a high LTV with no AUM was going to be a challenge. Furthermore, his income streams also posed a slight problem. My client was a successful businessperson and the owner of a number of companies, each with different focuses. He therefore had a high income, but this was taken from various sources. Many high street banks will not take 100% of the income into account if it comes from different business; they will judge which is the ‘main income’, taking 100% of this, and then only take 50% of any secondary income.
Fortunately, a private bank will take 100% of a client’s income into consideration. I was able to negotiate with a prestigious private bank on my client’s behalf for a 70% LTV mortgage. We were able to secure terms for an excellent rate of 1.8% + LIBOR, on a 5-year interest-only repayment term.
If you are looking for a high loan to value mortgage, a private bank is likely to be the best option. If you would like to discuss your options, I would happy to advise you further.