Every person has his or her own distinct financial status and spending habits, and so each has specific mortgage loan needs. Do you know which one is the best for you? This is a fast guide on the ideal mortgage options for every kind of borrower.
General Guide
The common thing that is applicable to all kinds of mortgages is whether it is a variable interest rate or fixed rate mortgage.
Below are the things that should be considered:
- Can you manage to pay your payment if it increases every month? This is for variable rate mortgages.
- Are the rates lower right now? It is the perfect moment to jump into a fixed rate mortgage.
- Would it be convenient if you secure a fixed monthly payment for a certain number of years? Fixed rate periods are available from 1 to 10 years.
- Do you find it difficult to borrow sufficient money? Switching to an interest only mortgage can lead to lower monthly repayments.
To understand more about this topic, below are several specific tips according to your mortgage needs.
For First Time Buyers
You can utilise a 100% mortgage that is usually offered by lenders to first time buyers. This mortgage has normal repayments and is an ideal option to get started.
Consider an interest only mortgage if you have a deposit but can’t afford huge monthly payments.
Settle for a mortgage that has a term longer than 25 years.
Self-Employed Mortgages
Choose a self-certified mortgage since it will not require any audited accounts and proof that you have an income, though you still need to present evidence that you can pay the monthly payments.
If you have a flourishing business, you can give three or more years of audited accounts, which show that you have a steady income to avoid any problems. Lenders are now very flexible.
For Homeowners
- Release equity from your home to acquire a reasonable amount of cash.
- Get “equity release” mortgages from your lender.
- You can borrow at least 95% of equity from your home, which you can use for home improvements, home repairs, lifestyle upgrades, and much more.
For Those With Large Bonuses But Low Basic Salary
The best solution for these types of borrowers is to get a flexible mortgage with the help of a mortgage broker. This is similar to an interest only mortgage, but with flexible mortgages your monthly payments are interest only and they can fluctuate anytime.
For Buyers Who Buy To Let
You will go through a credit check and you have to present evidence that the property you are planning to buy is an ideal business proposition. These types of packages are not popular but they are relatively helpful for divorced individuals who are looking for a new home or in the process of re-establishing their financial situation.