Types Of Mortgages & The Importance Of Mortgage Brokers

residential mortgage broker in Hampshire

Mortgages can be a scary concept. A simple google search for mortgages will show results from around the world and ever so many types of mortgages too. This can be confusing when it is your first time looking for a mortgage, buying a home, or anything related to this niche. Even more so if you don’t know the essential words and phrases related to this.

Then, you will also need to understand the different types of mortgages so that you can know what you need. Whether you are looking to buy a home to move into with your family or perhaps you want to buy and let it so that you can have a passive income there are various types of mortgages to cater to such specific needs. 

To provide some clarity on these matters, you should take some time out to learn about and understand some basic concepts. It can be immensely helpful to know the most basic concepts relating to mortgages so that you can further look into the mortgages that you need and are looking for. We’ll also take a look at how mortgage brokers and especially Residential Mortgage brokers can help you with your mortgage. 

Moreover, there are a few schemes from the government for first-time home buyers and for those who want to buy the council house that they’ve previously lived in. Then, your credit report will also be required for the mortgage. Let’s get right to it. 

The Help-To-Buy Mortgage

Buying a home is a dream for many people. It, unfortunately, remains a dream for many. When you purchase a home for the very first time, there are too many things to consider. It can be confusing and often a scary prospect. It also takes a lot of time for many young people to collect the amount of cash required to put in for the deposit.

This is where the government comes in to help. The government offers 25% of the total house value to the buyer. This can be used to make up the difference and help make the deposit easier. You cannot take out a residential mortgage for this. Instead, you will have to go for a Help To Buy Mortgage. 

The discount offered will also vary according to the location. The discount rate in London is much more as the price of the property is valued higher as well.

A Buy-To-Let Mortgage

This is a mortgage aimed at those who mostly already own a home and want to buy a second one to let it. This is often the residential property. This type of property also comes at a higher price and interest rate. There are more conditions attached to such property. 

The buyer is legally not allowed to live on the property. In cases of emergency, they can get special permission from the lender to live there for a duration. A deposit is not required for this type of mortgage, rather a balloon payment is to be paid at the end of the mortgage. 

This can be done with apartments as well. The lease to be charged to the tenant will be decided by the lender. This amount will be a little above the monthly payment that is due to the lender. Such a rate is kept to ensure that the payment to the lender will not be defaulted on. 

It is also possible to convert other mortgages into a Buy to Let Mortgage. With the help of a mortgage broker, this can be negotiated with your lender and then converted. The lender will need a good credit report just the same as other types of mortgages. 

Residential Mortgage 

A residential mortgage is just as the name suggests. It is a mortgage for residential properties for those who want to purchase a home and move into it. A good credit report and a steady income can get you a residential mortgage. You can get a residential mortgage broker to help you discuss terms and get favourable interest rates from the lender. 

For those with a bad credit report, income through non-conventional businesses, and such situations a specialist mortgage may be needed. You can get a specialist broker or a residential mortgage broker in Hampshire to negotiate the terms with the lender. Moreover, for specialist mortgages, you may need a specialist lender too. 

The Right To Buy Mortgage Scheme

This is a great option for those who reside in council houses. This is a scheme by the Uk Government that intends to help residents of council houses buy their homes. Though there are a few conditions that need to be met.

To be eligible for the Right To Buy Mortgage, the buyer will have to have lived in the council house for a total of three years. This can be over a longer time and does not require to have been completed in a continual period. It should amount to a total of 3 years. 

The benefit of this is that you can also buy it with a family member. This mortgage can be taken out with up to three family members. The house must also be an independent one with no shared rooms or areas of the house. 

How A Mortgage Broker Can Help You With Your Mortgage

Mortgage brokers have a better understanding of the requirements of the lender. They can also help you with your mortgage application to the lender and help you with your credit report. If you have issues understanding your credit report or how to fix it, a mortgage broker can help you with that.

Their access to multiple lenders can be very useful. Not only can mortgage brokers ensure you can find a lender no matter your situation, but they can also help tailor the mortgage to suit your needs. If you want the best rates so that you can pay back the mortgage with ease, then a mortgage broker is exactly what you need.