Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
One of the largest financial products which you will ever have to obtain, a mortgage is something which requires a great deal of thought. Here at Mortgage2day, we understand how difficult it can be to know what you are looking for and that is why we offer
an easy-to-understand guide to this area of personal finances and home ownership.
What is a mortgage?
A mortgage is essentially a type of bank loan. It is used when obtaining a property or in conjunction with property previously purchased. It allows you to purchase a home using credit obtained from a bank, building society or finance house. You can also raise
money using a property you already own as security. This credit is repaid over a set period of time (30 years is a common example) and a mortgage will usually be offered for a percentage of the value of the property – the most common of which is an 80 per cent mortgage.
Buyers will be required to provide a deposit for the home they intend to buy. The larger this is, the less money they will have to request in their mortgage application. Speak to a mortgage advisor at Mortgage2day now to get the help you need with buying a
property and obtaining a mortgage.
Types of mortgage
Despite being one of the most common financial products, many people are unaware of the numerous formats in which mortgages are offered. Some of the main types of mortgage are listed below but the best way to determine what type of mortgage you need is to
speak to a mortgage advisor.
- Fixed rate mortgage: these are the most common form of mortgage and retain the same interest rate and periodic payment plan throughout the duration of the fixed term.
- Variable rate mortgage: these mortgages see interest rates change as per the wishes of the lender. This can occur at any time and may not follow a strict schedule. The initial interest rate offered is likely to be low to act as an incentive to borrowers.
- Base rate tracker mortgage: another common form of mortgage, the interest rates for these mortgages follow the actions of the Bank of England base rate.
- Let to buy mortgage: this is where an individual rents their existing property in order to fund a mortgage on another property. This is often represented by the abbreviation LTB mortgage.
- Buy to let mortgage: the opposite of the above, a buy to let mortgage is obtained when the individual intends to rent the mortgaged property. It is known by the abbreviation BTL mortgage and may also be called a landlord mortgage.
- Self employed mortgage: these are mortgages specifically designed for those who are self employed. This addresses a niche in a mortgage market as self employed applicants may be classed as ‘high risk’ and thus struggle to obtain a traditional mortgage.
- Second mortgage: this is a mortgage which is taken out on a property which has an existing mortgage outstanding. A second mortgage is essentially a secured loan or further advance where a second charge is placed on the property. This is slightly different to
a remortgage, which is where the first mortgage is paid off and replaced by another. A mortgage advisor can help you navigate these processes if necessary.
Applying for a mortgage
When applying for a mortgage, of whatever description, it is important that you consult professionals. At Mortgage2day, we have a team of qualified mortgage advisors on hand to assist and advise you with your decision, helping you to make a successful application.
Protecting your mortgage
As mortgages are typically taken for a long period of time, it is important that you consider the ramifications this could have. Here at Mortgage2day, we appreciate that your situation may change over time and this is why we are as accommodating and flexible as possible.
Speak to our friendly advisors about mortgage protection and other insurance products and protect your investment. After all, your home is likely to be the biggest asset you own during your life and protecting it is therefore important.