Updated: 28/10/2024
Are You Looking for Help to Purchase a Property? When you decide to purchase a property, it becomes a major life-changing decision and is a huge step to take, whether you are a first-time buyer and have finally found your dream home, already have a property, and intend to move to either a larger one, or are down-sizing, or you wish to start your property empire with a Buy-To-Let.
Whatever your future aspirations involving property, to purchase a property you either have the cash available to purchase outright, or there is a very strong possibility you will need some way to borrow the money to purchase a property – This will generally come by applying for a mortgage for some or most of the funds in order to buy.
Then you need to start seriously thinking about what type of mortgage will suit your current and future lifestyle – This will generally depend on what your financial situation is, and how you really want to repay the money you loan to purchase your property.
What is a Mortgage and How Does it Work?
In the UK, a mortgage is a more popular and realistic way in which to purchase a property.
There is a multitude of types of mortgages available to those who require funds to purchase their next home – Here are the most popular:
- Repayment Mortgage
- Interest-Only Mortgages
- Fixed-Rate Mortgage
- Discounted Mortgage
- Tracker Mortgage
- Capped Rate Mortgage
- Variable Rate Mortgage
- Standard Variable Rate Mortgage
- Flexible Mortgage
- Offset Mortgage
So; without further ado, if you have decided to purchase a property let’s briefly cover the main types of mortgages available today and how they can help you achieve your goal to purchase a property. (A more in-depth description of each will be covered within other pages linked within our website).
OK, let’s start with…
Repayment Mortgage
To explain this, a Repayment Mortgage is basically where you would repay all the money borrowed for your mortgage, (Commonly known as the ‘Capital Amount’) whilst at the same time, also paying back all of the interest accrued on the loan.
Interest-Only Mortgage
The concept of an Interest-Only Mortgage, is that you would only pay the actual interest accrued on the outstanding mortgage loan amount every month. You would not be paying towards reducing the capital amount borrowed for your property.
Fixed-Rate Mortgage
A Fixed-Rate Mortgage is a type of Repayment Mortgage, but the interest rate is fixed for a set period of time and will not be affected by a Bank of England Rate rise or fall during the fixed rate period or any inevitable fluctuation in the mortgage market rates.
Variable Rate Mortgage
The Variable Rate Mortgage is a mortgage product where the interest rate can increase or decrease at any time, thereby causing a fluctuation in monthly payments.
Tracker Mortgage
A Tracker Mortgage is a product that basically ‘Tracks’ the Base Interest Rate and is a type of Variable Rate Mortgage – Meaning payments could increase or decrease accordingly.
Capped-Rate Mortgage
A Capped-Rate Mortgage resembles a Variable Rate Mortgage, but the main difference is the interest rate is capped and repayments cannot increase for the period of the loan.
What is the Loan Term of a Mortgage?
Most mortgages can run for up to 25 years, some less, but it generally depends on individual circumstances or the way in which the purchase would be financed.
How Do You Apply For a Mortgage?
The actual ‘Mortgage’ is basically a loan obtained through a Mortgage Application from a lender such as a Bank or Building Society or similar, which is used to finance the purchase of your property.
Your Mortgage Application will contain legal terms along with further legal contractual paperwork throughout the application process.
This will state that you will repay the money you borrow at an agreed interest rate (Which could be subject to change depending on the type of mortgage chosen).
The actual loan (Money you have borrowed to purchase your property), is ‘secured’ against the value of your home until the full amount of the loan has been repaid to the lender.
Those taking out the loan would be termed as the ‘Debtor(s)’ and the property owner, whilst those offering the loan would be known as the ‘Creditor’ and they own the loaned funds.
The purchased property would then be used as collateral by the lender if the loan is not paid back as agreed.
Is it Hard to Get a Mortgage?
Every lender has set criteria that they follow to make a decision on who they will offer a mortgage loan to. The High Street banks generally attract the eye of first-time buyers who have decided to purchase a property and are unsure of what to do or where to go for a loan, and they will offer you their preferred mortgage product.
Added to this, a buyer will also need to find out which loan will suit them, whether they can afford it, and over how many years they want it to run for.
This is where we come in – We can help with this and take most if not all the stress and worry away.
When you decide to purchase a property or have actually identified the one you have decided to settle in, our qualified Mortgage Advisors, can then begin to make your dreams a reality! They have access to the ‘Whole of the Market mortgage products and are not restricted to any one particular lender. In other words, they have access to lenders other than those generally advertised and not seen or heard of by most potential buyers.
The advantage of this is that after considering your needs, income, deposit, and personal finances, they will be able to find the most suitable mortgage product for your circumstances.
They will discuss all your options, collate all the required administrative paperwork, hold your hand, and walk you through the Mortgage Application process – Making it so much easier for you to purchase your dream property. (Generally, a fee is payable for this service).
Please note, We can advise on any type of Mortgage Product throughout the UK.
Do we Have to Come Along to Your Office?
No, not at all – When you decide to purchase a property, contact us and we can assist you by talking on the telephone, by email, or holding an online Zoom call – Whatever suits you!
Are You Looking for Help to Purchase a Property?
If you are unsure of how to apply for a mortgage or what you should do next, wherever you are in the UK, we can help and have advisors ready and waiting to help you. Simply complete the contact form HERE for a free and impartial chat with one of our qualified mortgage advisors.
Updated 2024