|
MORTGAGE LOAN
Hard Money Mortgage
A Hard Money Mortgage offers you a borrowing of high LTV of the value
of the property. Rates may be fixed, variable, discounted or capped. Opting
for a Hard Money mortgage means that you could risk facing a negative
equity situation if house prices fall. You may also be charged an above-average
interest rate and a mortgage indemnity premium.
Capped rate mortgage
A capped rate mortgage has a maximum interest rate for a given term. The
interest rate you pay cannot go higher than the agreed capped rate, thus
you know the maximum amount your monthly repayments could rise to. However,
if the basic interest rate falls below the capped rate, repayments will
also reduce.
100% Mortgage
A 100% mortgage offers you a borrowing of 100% of the value of the property,
i.e. no deposit is required. Rates may be fixed, variable, discounted
or capped. Opting for a 100% mortgage means that you could risk facing
a negative equity situation if house prices fall. You may also be charged
an above-average interest rate and a mortgage indemnity premium.
Self-certification mortgage
Self-certification mortgages are available for contract workers and the
self-employed. The lender will ask for details of the borrower’s
income but they will not require to see proof of total earnings. Other
terms will depend upon the lender’s requirement at the time and in
accord with the rates prevailing in the market place.
Variable rate Mortgage
A variable rate mortgage is one in which the amount you repay increases
or decreases in line with any interest rate changes. This means that you
cannot predict the monthly cost of the borrowing, which could cause financial
concerns within the mortgage period.
Buy-to-Let Mortgage
Buy-to-let mortgages are provided for property purchase for investment
in the private rental sector. They are assessed as though they are ones
for residential occupation. Assessment of borrower affordability can be
based on projected rental income and/or earnings dependent on the lender’s
individual policy.
Current Account and Offset Mortgages
A current account mortgage allows you to operate your mortgage borrowing
through a current account. This method enables you to save interest as
your normal cash flow will alter the outstanding debt. You will be required
to pay your salary into the account. An offset mortgage allows you to
keep your balances e.g. mortgage, savings, current account etc in separate
accounts but all balances are offset against each other thus allowing
the possibility of reducing the interest paid and could result in the
mortgage being repaid early.
Base Rate Tracker Mortgage
A base rate tracker mortgage will be based on the Bank of England base
rate and a possible loading for a set period or for the term of the loan.
The rate payable will alter in line with any change to the Bank of England
base rate.
Cashback Mortgage
A cashback mortgage provides a cash rebate on completion of the purchase.
The sum is either a percentage of the advance or fixed. This cashback
could help you to cover some of the expenses of setting up home but, this
bonus is often subject to higher repayment rates and may include penalties
for repaying the loan early.
|
