First Time Buyer/ Residential Mortgage
A residential mortgage is a large long-term loan secured against a property you own which will be used as residence for the borrowers. With this type of mortgage, you will not be allowed to rent it out to tenants, and it cannot be used for commercial purposes. All about your residential mortgage:
Usually for residential mortgage a minimum of 10% deposit of the property purchase price is required and the remaining 90% can be borrowed from the lender. Some lenders may go up to 95% of the property price.
The amount you can lend will be determined based on your income and affordability. All the lenders have their own way of doing affordability calculation and the amount can be borrowed varies lender to lender.
For example, if your purchase price is £300,000 you are required to provide at least £30,000 and rest of £270,000 can be borrowed from the Lender considering you are qualified for a residential mortgage. However, there are some lenders who lends up to 95% of the property value. Also, if you are a First Time Buyer and using government’s Help to Buy scheme then you may only need to provide 5% deposit.
Your monthly repayments consist of two parts, capital and interest. Every month you will be repaying a small portion of the amount which you borrowed as well as a percentage of interest. By the end of the term, you will have paid your mortgage in full if you made all your payments accordingly. Not being able to meet these repayments could result in losing your home.
Interest will be charged on the amount of the mortgage owed. It is charged as an annual percentage rate against the value of your debt. Once you start looking around for a mortgage, you will realise that there are loads of different types of products to choose from. So many in fact that the choice can be overwhelming and you probably don’t know where to start. Cheapest is not always the best since there are many other factors to consider.
Fixed – The rate is fixed for a specific period (normally 2, 3 or 5 years), which gives you peace of mind that your monthly mortgage payment will stay same regardless of any movement of Lender’s interest rate.
Variable- This is lender’s standard variable rate. If you choose this product, your monthly payment could increase or drop based on lender’s current variable rate. Which of course will be notified to you beforehand.
Tracker- Tracker mortgages generally track the Bank of England’s base rate, so your payments could increase or drop depending on market conditions.
Discounted- This is similar to tracker rate but here your interest rate charged is normally at a set discount below the lenders own standard variablerate which means whatever the lender’s variable rate your interest rate would be discounted form that rate.
Capped- Your interest rate and monthly payment can increase or drop but is guaranteed not to increase above the agreed ceiling rate.
Why Choose Olympia Finance for Residential Mortgage?
Olympia Finance is a specialist mortgage broker based in London and Essex, providing mortgage and insurance services throughout the UK. We have access to the whole of market Lenders with a wide range of criteria hence, we can help you find a mortgage deal that suits your needs. Even with non-standard circumstances, you may still be eligible for a residential mortgage. Contact our specialist team today to find out how we can assist you.