Large Mortgage Loans boasts a team of expert mortgage brokers who are experts in securing mortgages of £400,000 and over for clients in the UK and beyond.
A £400,000 home loan is a huge financial commitment. If you’re thinking of applying for a mortgage of this size, you’re likely to have plenty of questions. Here, we’ve put together a handy guide that covers everything you need to know about how to get a £400,000 mortgage, and when it’s best to seek the advice of our team.
Do I qualify for a mortgage?
When you apply for a mortgage of any scale, your lender will need to take the following factors into consideration before offering you a loan. These are often referred to as the lender’s eligibility criteria.
Do you have a suitable mortgage deposit?
You are more likely to be accepted for a £400,000 mortgage if you have saved a substantial deposit towards the cost of your new home. Most lenders ask for at least 10% of the purchase price, but the more you can put towards the purchase, the better your mortgage terms will be. This is because the Loan to Value (LTV) ratio will be lower, so there will be less risk to the bank or building society.
What are your current financial commitments?
Have a think about all your monthly outgoings, and whether or not you can afford a monthly £400,000 mortgage repayment on top of all your existing living costs. Your bank may ask to see copies of your bank statements prior to offering you a mortgage to establish whether or not you’re in a comfortable financial position.
You’ll also need to think about the costs that will be incurred when you move into your new home. For example, how much can you expect to pay for utilities, broadband and council taxes? And will you be able to afford these fees on top of your mortgage repayments?
What is your personal situation?
Your marital status will affect your eligibility for a £400,000 home loan.
If you’re married, you can use both of your incomes to determine the amount you can borrow (and you’ll often be able to apply for a larger mortgage because you’ll both be named on the contract). However, bear in mind that if your partner has a low credit score, or is in a significant amount of debt, this could affect your chances of not only getting a mortgage in the first place, but enjoying competitive interest rates on your loan amount.
If you’re single, you’re no less likely to be accepted for a £400,000 mortgage. The lender will just need to make sure that you are generating enough income to qualify for a loan.
Self-employed mortgage applicants will usually need to provide proof of earnings from the last two years in order to be considered for a £400,000 house mortgage. Those with more complex income structures may be subjected to further investigations during the application process, so if you rely on bonuses, dividends or inconsistent wages, be prepared to answer more questions.
Can you get a mortgage on the property you wish to buy?
Many providers won’t offer mortgages on certain types of properties. Conversions, thatched properties and Grade 1 listed buildings are notoriously tricky to purchase unless you’re a cash buyer; homes near floodplains and properties with short leaseholds do not normally appeal to lenders, either.
If you are keen to invest in an unusual property, but you’re concerned that you will be turned down by the High Street banks, contact our mortgage brokers. Our team have access to a wider pool of specialist lenders who may be able to offer the right product for your requirements.
Can I get a £400,000 mortgage?
If you meet the eligibility criteria listed above, you should be able to apply for a £400,000 mortgage.
However, to be doubly sure that you’re eligible for a £400,000 mortgage on your new home, we would recommend contacting our brokers. They will assess your financial situation to establish your suitability.
What are the typical repayments on a £400,000 mortgage?
The amount you have to pay towards your £400,000 mortgage on a monthly basis will depend on three points:
- The type of mortgage you have applied for, ie whether you’ve opted for a repayment or interest-only mortgage
- The interest rate that’s being applied to your repayments by the bank or building society
- The length of your mortgage term – 30 years on average
If you are considering an interest-only mortgage the lender will require proof of a credible repayment strategy.
There are a multitude of £400,000 mortgage calculators available on the web. These use your mortgage product type, your preferred terms and current interest rates to help you determine whether or not you can afford the fees that will be incurred on a mortgage of this size.
Our mortgage calculator will be able to give you an idea of what your monthly payments might be for a home loan of £400,000.
Still not sure how to get a £400,000 mortgage?
Contact Large Mortgage Loans! We’ve got decades of combined experience in sourcing and securing mortgages of £400,000 for clients who are in varying financial situations.
