Mortgages

First Time Buyer

In order to get your first mortgage, you must be able to accumulate enough funds to put a deposit down. In general, the bigger the deposit, the better the mortgage deals are that will be available to you.

There are many things to consider when taking out your first mortgage that you may not be aware of, including:-

• The fees associated with obtaining a mortgage and buying a home
• If you wish to fix the interest rate and your monthly payments
• How long you wish to commit to your mortgage for
• Whether or not a mortgage lender will allow you to borrow the money to purchase a property depends on many things, including;-
• Your income
• If you can afford your mortgage on a month to month basis
• Your personal situation (age, residence, etc)
• Your credit history
• The value of the property
• The type of property

Remortgage

A remortgage is used to replace an existing mortgage. The reasons people may decide to remortgage include, securing a better interest rate and obtaining further borrowings.

Most people who take out a mortgage will not keep it until the end of its term and will remortgage several times in their life.

Further Advance

A further advance is when you borrow more money from your existing lender on a property. Reasons people may wish to take out a further advance include home improvements, debt consolidation and to help assist family members getting on the property ladder.

In order to borrow more money against your property you will have to apply to your lender in the usual way and be reassessed on affordability and criteria.

A further advance may be cheaper than taking out an unsecured personal loan, but you must make sure the terms of the further advance are suitable for your situation. Some lenders may impose a tie-in period on the new loan which restricts your options when your original mortgage would have been due to be reviewed.

Buy to Let

A buy to let mortgage is a loan for purchasing or refinancing residential property which is let to tenants rather than lived in by the borrower.  Rates and fees are typically higher than normal residential mortgages and a larger deposit is required.  There is also an additional Stamp Duty Land Tax applicable when purchasing a buy to let property.

Adverse Credit

Borrowers who have had past problems with credit, for instance; default, IVA, debt management plan, bankruptcy or County Court Judgements can often find it much more difficult to obtain a mortgage and in some cases impossible dependant on your individual situation.

Shared Ownership

It is possible to purchase just part of a property using a shared ownership scheme. This is whereby you purchase a percentage of the property (usually 25%, 50% or 75%) and a housing association keeps ownership of the rest. You then pay the housing association a rent for their proportion of the property.

This type of mortgage can help borrowers with limited affordability and those who do not have enough money to put down as a deposit, although the mortgage lender may want you to put some capital down to ensure you are committed.

There are additional eligibility requirements for this type of mortgage.

Right to Buy

The Right to Buy scheme is available for some council and housing association tenants who wish to purchase the property that they currently live in and pay rent for. They are able to get discounts on the value of their home depending on the number of years they have lived in the property. There are eligibility requirements which mean that not everybody is able to purchase their home in this way.

Second Charge Loans

Whereas a further advance is borrowing additional monies from your current mortgage lender a second charge loan is borrowing these from a separate lender.  This is still a secured loan which uses your home as security.