What Mortgage Can I Get - Our Top 7 Ways of Borrowing More
With so many mortgage providers on the market offering a wide range of different mortgage products, it can be challenging to sift through the industry jargon and terminology to decipher the best mortgage option for you.
Taking out the wrong product can significantly limit your borrowing capacity, and you might be able to borrow much more than you think if you speak to the right lender and take out the right product for your situation.
In this guide, we’ve consolidated 7 of our most popular mortgage solutions that you need to know about – they could help you borrow more than you think you’re eligible for. Some of these are often overlooked by the general public, who aren’t familiar with the wide range of finance options.
We’ve also included case study examples that we’ve completed for each type of finance to understand precisely how they function in real-life scenarios.
In this Guide
1. First Time Buyers – How to Borrow More
2. Large Self Employed Mortgages
3. Finance for divorcees
4. Over 60s Mortgages
5. Professional Mortgages
6. Mortgages with adverse credit
7. High Net Worth Mortgages
First Time Buyer Mortgages – How to Borrow More
Getting that first step onto the property ladder is becoming harder and harder in the UK, with house prices rising steadily year on year despite global events such as the COVID-19 pandemic throwing uncertainty at the market.
Salaries in the UK are not rising at the same rate, and there is now a vast disparity between the average salary in the UK versus the average property price.
Typically, with an FTB mortgage through a standard lender, you can only borrow 4.5 times your income.
And yet, with the average salary in the UK at just over £30,000 and the average property price at £274,000 as of January 2022, current house prices are averaging at a ratio of 9 times the average salary.
Without combining your income with a partner’s in a joint application, it’s hard to imagine how an individual can afford a reasonable mortgage by themselves for their first home.
However, there are three solutions that many first time buyers don’t know about that can help them get a bigger mortgage:
First Time Buyer Mortgages at 5.5x Salary
Firstly, our brokers at Clifton Private Finance work with specialist lenders - and even some high-street lenders - that can stretch their lending capacity to up to 5.5 times your salary for first time buyers in the right situation.
We can take a holistic view of your finances, current income, and potential income and recommend you for a 5.5x salary mortgage if you fit the criteria.
And this type of mortgage is still available with just a 5% deposit for some cases.
For more information, read this: NEWS: First Time Buyer Mortgage at 5.5 Time Salary Now Available.
Up to 7x Salary Mortgages
Secondly, we work closely with another lender that can provide borrowing at up to 7 times your salary. There are slightly stricter requirements to meet, and you’ll need at least a 10% deposit as a first-time buyer for this product, but if you tick all the boxes, it could make the difference in securing your first property.
For more information, including application criteria, interest rates and fees, read this: NEWS: New Mortgage Launch: Borrow 7x Your Income
Income and Deposit Boosters
And finally, if you can’t borrow at the level you need with 5.5 times your salary or don’t fit the criteria for higher-income multiples of up to 7 times salary, there are still options.
Our third solution is getting help from your family, but not in the typical way of a gifted deposit.
The problem with a gifted deposit from your parents or another family member is that many families have the wealth to help, but not the cash.
Their money is tied up in their home, pension, or even a buy to let property provide needed income.
Releasing this wealth would mean selling up the family home and downsizing or selling other valuable or sentimental assets that you want to hold on to.
But the good news is that there are other ways that your parents could help with your mortgage.
- Deposit Booster
We can leverage the equity that your family member has built up in their property to get you a bigger deposit for your first house purchase without them needing to sell their home to raise funds.
- Income Booster
Or, we can use their annual income on your mortgage application in a joint borrower, sole proprietor mortgage (JBSP). This means they can add their income to yours without needing to be named on the property deed or securing the mortgage against their own home.
To get the full details, read this: First Time Buyers: How To Boost Your Mortgage Deposit and Borrowing Power
Bigger Self Employed Mortgages
You might have found that your self-employed income makes your mortgage application more of a headache. You may even feel that you’re at a disadvantage compared to employed individuals.
But while some mainstream lenders may prefer employed income because of its security, you can still qualify for the best mortgage deals with self-employed earnings if you know how to package your application and speak to the suitable lenders.
Speaking to a mortgage broker is the fast-track method to get the largest loan at the best rates.
Here’s a summary of some of the unique ways we help our clients achieve more flexible finance and larger loan values with their self employed income:
Using your company’s net profits as your income
Many of our clients who own their own company approach us having only taken a limited salary from their company to save them from paying higher rates of income tax, only to find that their lower-income has limited their borrowing eligibility despite being able to afford much a larger mortgage through their company’s earnings.
At Clifton Private Finance, we work with lenders who are happy to leverage your company's net trading profits towards the size of your mortgage instead of the income you’ve taken from your business.
This means that 100% of your company’s profits can go towards your mortgage, gross personal income tax on your salary and dividends, which could considerably increase your loan size.
For more information, please read our complete guide: Mortgages for company directors: how to use company profit to get the size of the loan you need
Using a director’s loan for your deposit
Another tool for borrowers who own their own company is taking a director’s loan to fund your house purchase deposit.
Whether this will be the most tax-efficient method will depend on how you repay the loan and your personal and company’s tax strategy (it’s probably worth speaking to your accountant). Still, it could serve as a flexible funding solution for your deposit, and it’s just one example of the unique solutions we can provide for self employed borrowing.
Our case study below demonstrates how we used this method for one of our recent self-employed clients.
Submitting the correct form of self-employed income history
First of all, make sure you have the proper proof of income for your self employed earnings. Getting the documents together before you will speed up your mortgage application process.
- Your SA302 (Tax Calculation)
- Your Tax Year Overview
Please read our guide on where to find and download these here.
And if you’ve had inconsistent trading years as a self-employed person, perhaps due to the effects of the COVID-19 pandemic, speak to a specialist mortgage broker.
We can liaise with your accountant to put forward the best application for your self employed earnings.
For example, this could involve:
- Using an average of 3 years of income history instead of 2
- Adjusting your company’s financial year-end to reflect your company’s most recent performance
- Or even just providing your lender with additional context and assurance surrounding the security and validity of your income streams.
Using a private bank or lender
Finally, if you have a wide range of complex, self employed income streams, you may be best speaking to a private bank that can take a more considered view of your application compared to the primarily automated processes of mainstream lenders.
Private lenders can also stretch their lending capacity to reach higher loan to value ratios and higher loan to income ratios for suitable applicants.
We cover more of the details and benefits of private mortgage finance later on in this guide here.
And read our full guide on self-employed mortgages: Self Employed Mortgage - How to Improve your Chances of Getting One in 2022
Mortgages Solutions During Divorce
After hearing about the benefits of property finance during divorce, many clients come to us to see if we can provide a solution to having to sell the family home to split your assets.
Many of our clients are taken aback by the range and flexibility of finance options available to them in this situation, mainly through leveraging their existing wealth and assets as security or as a source of equity release.
For example, we can source equity release finance or a Retirement Interest Only Mortgage (RIO Mortgage) against existing assets which can then be used to buy your ex-partner out of the primary residence while staying in line with the court-ordered split of your wealth.
And Retirement Interest Only mortgages provide a unique level of flexibility:
You are not required to make monthly capital repayments towards your loan with a RIO mortgage. Your only commitment is paying off the interest each month – a considerably lower and more affordable amount than you’d expect from a standard repayment mortgage.
Retirement interest-only mortgages also have no fixed term before which you must repay your loan. This means you'll usually only need to repay your borrowing if:
- Your property is sold
- You go into care
- You pass away
Although you’ll be paying interest on your borrowing, many of our clients find that the flexibility later-life finance can provide is far more valuable than the costs, especially if it means keeping the family home and not needing to downsize or relocate at the wrong time.
The main requirement to get the ball rolling with property finance in divorce is to have receipt of your Decree Absolute. This is essentially your rubber seal from the judge determining the split of your wealth and ensures your lender that neither party can contest or change the sharing order from this point.
Over 60s Retirement Interest Only Mortgages
Aswell as divorcees who need to rearrange their wealth structure, we can also help source flexible finance for those over 60 to keep up with their costs of living by utilising the equity built up in their homes.
We work with specialist Retirement Interest Only mortgage providers that can provide more considerable mortgage finance than most banks and building societies operating in the sector.
Specialist retirement mortgage lenders can leverage your state pension, private pensions, rental income, and other income streams. You have to raise more than 4.5 times your income in the suitable cases secured against your property.
With help from a specialist mortgage broker, the right lender can carefully offset your expenditure versus your income. Outgoings for those over the 60s are typically lower than standard mortgage applicants with dependents and busier lifestyles. This enables the suitable lenders to let you borrow more, and they can provide mortgages at 5, 6 or even higher multiples of your annual income.
And as detailed above, RIO mortgages have no fixed end date, meaning that you don't have the pressure of a deadline before which to sell assets and repay the mortgage.
Instead, they will typically keep running until you decide to sell your property or go into care or pass away.
This means you can stay in your home for as long as you are comfortable and don’t need to worry about downsizing or relocating to another property if you don’t want to.
How much will my mortgage cost?
Please look at our mortgage calculator to see what your monthly repayments could be with an interest-only mortgage compared to a capital repayment product.
And read our guide to large interest only mortgages for more examples of how they can be used.
Bigger Mortgages for Professionals
Suppose you’re a high earning professional with qualifications under your belt and a well-trodden career path. In that case, you could be eligible for borrowing more than 5 times your salary from the right lender.
We work with various lenders that specialise in specific professional sectors. Their underwriters are familiar with the career paths of their applicants within their particular niche. They have an in-depth understanding of what kind of mortgage they will genuinely be able to afford throughout its term.
Whether it’s because a large chunk of your earnings is through annual bonuses and commission, or your salary is due to ramp up over the next 5 years considerably thanks to your qualifications, you could be eligible for more flexible forms of finance that reach beyond the upper echelons of standard mortgage affordability calculations.
Our complete guide goes into more detail: How to get a professional mortgage
And here are some of the professions for which we can source specialist property finance:
- Law Partners and law professionals
Read about our services here: Mortgages For Law Firm Partners - Specialist Broker
And check out our complete guide for mortgages for new partners here: How to Get a Mortgage as a New Law Partner
And for other legal professionals: Mortgages For Solicitors: Finance to Suit the Legal Profession
- Mortgages for entrepreneurs, angel investors and venture capitalists
- Trader mortgages
Mortgages with Adverse Credit
If you have a history of adverse credit, such as defaults on previous loans or unpaid debts, you may have been turned down by mortgage lenders for new property finance.
Your credit score and credit history go hand in hand with your ability to get a mortgage; however, many people don’t realise that you can still get a mortgage with adverse credit – you need to go to the right lender.
At Clifton Private Finance, our mortgage advisers work with lenders specialising in helping people with adverse credit get the borrowing they need.
They won’t rule out your mortgage application based on your credit history.
Instead, they’ll look at the broader context of your credit history, what’s still outstanding, your current credit score, and also your broader financial situation and income, to provide you with finance if possible.
If they deem you able to afford a mortgage and keep up with repayments, they will offer you a loan.
Many people in this type of situation choose to speak to a mortgage adviser first. Not only can a mortgage broker advise you on whether a mortgage is a suitable and affordable loan for you, but they can also package your application to their connections at the more lenient lenders to increase your chances of being accepted.
For more information about how your credit score and history affect your mortgage and how to improve your score, read our guide: Mortgages and Credit Scores: What You Need To Know.
Specialist High Net Worth Mortgages
You may think that as a High Net Worth individual, you’ll have no problem securing large-scale property finance, thanks to your high income or total wealth.
And while this may be the case for securing a mortgage well within your affordability, it often isn’t so easy if you’re trying to stretch your affordability and borrow at the maximum loan amounts available to you.
The reason for this is that to reach higher levels of finance; you’ll likely need all of your income and assets to be taken into account to get an adequate loan size – and most mainstream lenders, including high street banks and building societies, aren’t equipped to process complicated income streams and wealth structures.
Whether it’s income from a company you own via an off-shore trust arrangement, income paid in a foreign currency, or a bespoke portfolio of assets, including private business investments and stock portfolios, you’ll likely need to speak to a specialist HNW mortgage lender to get this wealth to count for your mortgage.
In the suitable cases, private banks can also look past the standard income multiples that traditional lenders use if you have sufficient wealth and income potential to offset the risks, and they can also offer finance at a higher loan to value if you don’t have cash readily available for a deposit.
The issue that most of our clients find is that private banks and specialist lenders alike require a formal introduction from an existing client or an intermediary with a connection.
You can’t often approach a private bank directly and expect to be considered for their lending services. Especially if you only require property finance and not total wealth management – private banks typically look to establish a long term financial relationship with clients that span across many wealth areas, including inheritance tax planning, international tax advice, protection, wealth management and more.
For clients that exclusively require property finance, underwriters at private banks prefer to liaise with a specialist mortgage broker instead of a client directly.
An experienced mortgage broker gathers the relevant information and context about your scenario and requirements and paints a picture to the lender that’s holistic but concise, making the process more efficient for all parties involved.
To learn more about how much you can borrow through a private bank, we have a complete guide to High Net Worth Mortgages, including examples of cases.
And if you're unsure if you'd qualify for this level of finance, we have a blog post on what exactly qualifies as a High Net Worth mortgage client.
Give us a call
Contact us to arrange a convenient time for an in-depth first discussion with one of our trusted finance brokers and see how we can help:
Or click here to make an online enquiry with us.