Mortgages

Buying a home is usually the start of a brand new adventure but often can be a stressful experience. With more than 200 lenders to choose from offering literally thousands of schemes the task of finding the most appropriate mortgage can be somewhat overwhelming.

Moreover, today’s marketplace is extremely competitive and many lenders will offer incentives, which may or may not appear attractive when the small print is scrutinised. This is where the knowledge and expertise of a Financial advisor can prove extremely useful, especially as they are also able to access competitive products and rates that are not available to the general public.

There are two main types of residential mortgage:

• Interest Only Mortgage
• Repayment Mortgage

Regardless of the type of mortgage, there are a five main types of mortgage interest rate to consider. If you're buying a property, you need to remember to that there are several other significant costs involved. Legals fees and arrangement fees may also apply to equity release mortgages.

Loans secured against rental property differ slightly from conventional mortgages and fall into two categories:

• Buy to Let Mortgage - This is a mortgage on a property that will be let by the borrower to tenants. Projected rental income, rather than salary income multiples, is primarily used by the lender in order to calculate the maximum loan permitted.


• Let to Buy Mortgage - This is a mortgage where the borrower’s current property is let to tenants and the rental income is used to cover the mortgage repayments on the new property, bought by the borrower as a main residence. Projected rental income, rather than salary income multiples, is primarily used by the lender in order to calculate the maximum loan permitted.

Although rental incomes may cover the cost of servicing a mortgage due consideration should be given to the issues associated with untenanted property and the negative equity. Clearly, mortgage payments need to be met even if a property is untenanted and if under an interest only mortgage, upon sale, the proceeds would need to be sufficient to repay the capital outstanding, after any tax considerations.

Buy to Let Mortgages are not regulated by the Financial Services Authority and your home may be repossessed if you do not keep up repayments on your mortgage.