If you're thinking about buying a property, it's likely you'll need a mortgage. It's a good idea to think seriously about what you can afford and apply for a mortgage before you start viewing properties, so you’re in a position to make a serious offer when you find the right one.
Types of mortgages
A mortgage adviser or lender can advise you on the right type of mortgage for your circumstances. Before making contact, it's useful to familiarise yourself with the options.
With a Fixed Rate mortgage, you pay a fixed interest rate for a fixed period and the rate and duration are arranged at the outset with the lender. The Fixed Rate period is typically 2, 3, 5 or 10 years and you will generally pay a higher rate for a longer fixed duration.
With a Tracker Rate mortgage, the rate of interest you pay is tied to the base rate set by the Bank of England (BoE). Typically, a tracker rate mortgage will be set at a certain percentage above the BoE base rate. This could mean that the rate is lower at the outset than a Fixed Rate alternative, but you will be exposed to fluctuations associated in the BoE base rate. Such products may often benefit from greater flexibility in terms of early repayment.
A Discounted Rate mortgage is linked to an individual lender’s Standard Variable Rate (SVR). The lender may offer a discount to their variable rate for a specified period but beware that there is no certainty as to what your future payments will be.
Buy to Let
Buy to let mortgages are for investment properties where the intention is for the property to be let rather than occupied by the owner. Lenders will consider both a property’s rental income as well as your personal income as the basis for determining whether to lend. Should you be an existing landlord, then they may also look to assess your existing portfolio when considering additional purchases.
When looking for a mortgage, you can have two main options. You can speak to a mortgage adviser, or directly to the lender (usually a bank or building society). The benefit of a professional mortgage adviser is that they can guide you through the mortgage options available across the whole of the mortgage market. LDNfinance is an independent, ‘Whole of Market’ mortgage specialist. With access to a wide range of mortgage deals, they will listen to your needs and tailor a solution. From your initial mortgage enquiry, LDNfinance will assign you your own personal mortgage adviser who will then guide you through the entire mortgage and house-buying process. Your mortgage adviser and support team will ensure that you understand all aspects of the transaction, receive regular updates throughout the journey and ensure things run as smoothly and efficiently as possible for you.
In the early stages of planning, mortgage calculators can be useful tools to help you work out what you might be able to borrow and what your repayments could be. For tailored advice, contact LDNfinance directly.