How To Get A Great Mortgage
Got your eyes on your dream home? Once people start breaking into the property market, they also need to look for a suitable way to pay for any prospective homes they are looking at. A mortgage is a secured loan that you take out either to buy a property outright or to fund the purchase of another one. Mortgages come to represent a very specific kind of residential loan. The mortgage provider will provide you with the funds to pay for the property in full, and in return the homeowner will make monthly payments to the bank over a period spanning somewhere from 10-35 years.
Mortgages in the UK
There are two main types of mortgages available to UK residents. These are a repayment mortgage and an open mortgage. With a repayment mortgage you pay a lump sum payment upfront as well as repaying the loan amount over a fixed period of time such as 30 years or until you reach the end of the loan amount. This is the usual type of mortgages Glasgow homeowners tend to go for, since you know the end date of your payments and can play accordingly.
A repayment mortgage involves meeting certain requirements. To qualify for a repayment mortgage, you must have a specified level of income, have a specified level of expenditure, and have a specified debt to income ratio. The debt-to-income ratio is how much debt you owe against how much income you have. This ensures that you will be able to repay the mortgage. To get a competitive rate of interest, you may need to increase your credit rating and/or take out a loan with better rates of interest and bigger repayment periods. Some lenders require a co-signer to qualify for the mortgage and the borrower must also meet certain criteria.
Can I Buy A House With A Loan?
Open loans can be flexible and offer more flexibility than repayment mortgages. Open loans are designed for people who do not qualify for a repayment mortgage. These loans are usually easier to meet because the borrower doesn’t have to commit to paying back the loan until the full amount has been paid off. Flexible open-loans require less documentation and approval, which make them appealing to those who are looking to get a mortgage but don’t want to have to meet strict requirements. Some open-loans require little to no down payment, which make these loans attractive to those who have good credit and an income that can cover the payments of the loan.
What About Fixed Rate Mortgages?
Fixed rate mortgages also make a good option for first time home buyers. Fixed rate mortgages are interest only loans that have a specific interest rate and term. Although there are other types of loans such as negative amortization, fixed rate mortgages provide the security and stability in the mortgage. Many buyers prefer this type of mortgage, because it requires little money upfront, and you know exactly what you are in for.
There are many different types of mortgage. When shopping for a mortgage, you should familiarize yourself with the different types to choose from. Each mortgage type differs in the amount they will allow you to borrow, the terms they have, the costs involved, and the way in which the payments are calculated. Choosing the right mortgage will help you enjoy your new home with affordable payments and the security of knowing that if you need to refinance or sell your home that your mortgage can be easily handled. With proper research and due diligence, you will soon find the perfect mortgage to fit your individual needs.