Finding your way through the mortgage maze
From castles to unique dream homes, if your property search doesn’t fit the typical mould our top tips can help you through the mortgage maze.
3 min read
Coutts clients often have unique needs when they’re looking to get a mortgage. Many have non-standard incomes that don’t tick the usual boxes, and they tend to be looking to borrow against unique properties that are difficult to value. Getting a mortgage on a suburban semi is one thing, but what if you want to borrow against a castle?
In these circumstances, securing a mortgage can feel as if you’re in a maze, trying to navigate your way to the prize in the middle. But with the right support and guidance, there should be a clear way through, no matter how sophisticated your requirements.
Putting incomes in context
Coutts clients include many people that don’t have a typical income. They could be an entrepreneur reinvesting all their income in their business, or a partner in a law firm drawing the majority of their earnings from the partnership profit distribution. They could even be a performer or sportsperson who depends on fees, sponsorship or high-end prizes, for a significant part of their income.
Ever since the FCA’s Mortgage Market Review regulations were introduced in April 2014, all lenders in the UK are required to gather certain pieces of information and evidence from clients to validate that a mortgage is affordable and sustainable. This also allows them to demonstrate that they have loaned money responsibly.
For most borrowers this simply means providing copies of bank statements and monthly payslips. For our clients, however, meeting these requirements can be a time consuming and complicated.
If you have a complex income, then preparation and working with your Coutts advisers is key. Our experience in dealing with non-standard incomes means that we can help you understand what steps you’ll need to take.
And the earlier you can begin the process the better, because it can take time to arrange all of the relevant paperwork.
Not your average properties
Many of our clients want to buy properties that stand out. These can include listed buildings of great historical significance, unique modern designs utilising cutting edge materials, or properties that might just be much bigger than normal.
This can make it difficult to accurately assess the property’s value. How do you value a property that’s so different from any other in the street, the town, or even the whole country?
This is another area where Coutts as your lender, can help. We have access to specialist valuers who are used to dealing with properties and building methods that stand out from the crowd. And in cases of down-valuations, they can help make sure you have sufficient financing in place or provide assistance in renegotiating the purchase price if necessary.
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The mortgage maze doesn’t have just one route. You can choose different paths, depending on the purpose of the purchase that can lead to many different ways to fund a property, each with advantages and disadvantages.
As well as the perennial choices around whether to take a repayment or interest-only loan, or what length of term to go for, you may want to think about the structure of the mortgage itself. Some of the key options from Coutts you could consider include:
- Offset Select An offset mortgage allows you to deduct – or offset – your deposits against your mortgage balance for the purpose of calculating interest. So, if you have a significant cash balance in your accounts you may be able to reduce your overall borrowing costs.
- Family option As part of the Offset Select product, family members are able to use their account balances to offset the interest of the borrower. This is a great way to help your children, for example, lower their monthly payments or pay off their mortgage more quickly.
- Currency mortgage If you earn your income in US dollars, euros, Japanese yen or Swiss francs, you may want to protect yourself against any potential currency fluctuations by taking out a currency mortgage
These are just a few of the main options available. There are many different solutions to the different scenarios, and again this is where specialist help and advice is crucial. As a specialist lender, Coutts can provide a mortgage that is tailored to your circumstances, offering security and value for money.
While it might feel like cheating to look at a map before entering a maze for fun, when you enter the mortgage maze preparation is everything. Often the first step, no matter what your experience or background, is to look into what typical payments on a mortgage might be.
This is where mortgage calculators come in. A mortgage calculator will help you understand how much you can borrow or what the repayments might look like on different mortgage amounts. If you want to get started on the right path through the mortgage maze, you can find the Coutts mortgage calculator here.
If you would like to discuss your mortgage requirements with one of our expert advisers, please contact your private banker or Coutts 24 on 020 7957 2424.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
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How do you get a mortgage on a castle? Our top tips for borrowing against a unique property, or if your income doesn’t fit the usual mould, will help you through the mortgage maze.
About Coutts Lending
Whether you need a mortgage, want to borrow against an investment portfolio or need a personal loan, Coutts advisers will work with you to understand your lending needs and offer sophisticated solutions.Explore more about Coutts Lending