Residential Mortgage
If you have an existing residential mortgage but would like to move out of the property and convert the mortgage from a residential mortgage to a buy-to-let mortgage, then our team can help.
What is a Residential Mortgage?
A residential mortgage is a loan for the purchase of a home you intend to live in. The home serves as collateral for the mortgage loan. Your lender may seize ownership of the property and sell it to recoup damages if you are unable to make payments. Residential mortgages are typically determined by three factors: income, creditworthiness, and property value. You have the option of fixed or variable rates for this mortgage. Your monthly payments will be constant for the duration of the set period if you select a fixed rate. If the interest rate is variable, your monthly payments could increase or decrease.
A residential mortgage is a loan for the purchase of a home you intend to live in. The home serves as collateral for the mortgage loan. Your lender may seize ownership of the property and sell it to recoup damages if you are unable to make payments. Residential mortgages are typically determined by three factors: income, creditworthiness, and property value. You have the option of fixed or variable rates for this mortgage. Your monthly payments will be constant for the duration of the set period if you select a fixed rate. If the interest rate is variable, your monthly payments could increase or decrease.
Residential mortgages are repaid over a period of five to forty years in monthly installments. The majority of people take out a “repayment mortgage,” sometimes known as a “capital and interest” mortgage. This indicates that in order to pay off the mortgage in full at the conclusion of the term, the monthly payment includes both the interest expense and a repayment component. An interest-only mortgage which would require smaller monthly payments is an option for those with greater incomes or larger deposits. As an alternative, you would need to convince the lender that your repayment plan was reasonable and possess the resources necessary to pay off the entire debt at the conclusion of the mortgage term.
Advantages of Residential Mortgages
What is a Second Residential Mortgage?
A loan obtained in addition to an already-existing residential mortgage is known as a second mortgage. The same real estate as the initial home mortgage serves as collateral for these loans. After your initial purchase, you can use a second mortgage for debt consolidation, home improvements, or other necessities. You can also use it for other purposes.
Usually referred to as a second charge, a second home mortgage is obtained from a separate lender than the original one. This is so that, in the event that something goes wrong, the first lender will have the “first charge” claim against the property. Second-charge mortgages may have higher interest rates and fees than first-charge residential mortgages because of the additional risk of being the second in line, in the event that something goes wrong. Further advances are loans that are occasionally considered by the first lender.
Our advisors can assist you if you’re purchasing your first house, moving, want to raise additional funds, or simply want to get a lower mortgage rate. For more detailed information, be sure to consult one of our mortgage advisors. They can assist you in determining which home mortgage best suits your needs and in understanding your possibilities.
Eligibility
To be eligible for a residential mortgage, applicants must meet specific criteria, including:
- Aged 18 or over
- And purchasing a property in England, Wales, or Scotland.
- Applicants must also have an income sufficient to cover the monthly mortgage payments and other living expenses.
It is possible to arrange a residential mortgage even where you have complex requirements. For example, we can assist customers that have had credit blips, been turned down by high street lenders, have only been self-employed for a year, are employees working on contracts and more.
If you would like to find out if you qualify for a mortgage, or if you have an existing residential mortgage but would like to move out of the property and convert the mortgage from a residential mortgage to a buy-to-let mortgage, then our team can help. Contact us today to find out more.