If a person is wealthy, they might presume that a mortgage will be easy to obtain. According to a November 2016 report in the Financial Times, however, many well-off individuals find it difficult to get a loan.
Since the financial crisis, banks have tightened up their criteria for lending, and this has led to them turning down more applications, including ones from wealthy individuals.
FTAdviser.com reported that during the last five years, of the top 11% wealthiest individuals in Britain, 818,000 have been denied mortgages and buy-to-let mortgages.
Obtaining a large loan requires a good credit rating and this is not solely based on a person’s assets. A credit rating takes into account existing borrowing as well as how long a person has lived in their home. A rich person may not have taken out any loans so has no credit history. They may pay off all their credit card balances each month. If they have recently moved, this will lower their credit score, especially if they have not yet registered to vote at the new address.
It is straightforward to check your credit rating and there are many techniques that can be used to increase a credit score. Anyone that wants an individual mortgage or a commercial mortgage should check their score before applying for a loan.
Different lenders have different criteria for mortgage lending. A mortgage broker can access many deals, which makes them likely to find a suitable mortgage for wealthy people.
