Uk Mortgages

Written by Jeremy Horelick
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UK mortgages are impossible to classify in one broad category. There are some 150 qualified lenders across the UK offering upwards of 4000 products to first-time buyers and current homeowners alike. Finding the most appropriate (and affordable) mortgage then becomes a matter of juggling umpteen different variables, a few of which are explored here.

One of the most important factors in buying UK mortgages is income. Are you buying a home based on a single salary or two? Often the multiples on your maximum loan allowance are higher when you factor in dual incomes. Additionally, how much debt do you currently hold? Any serious lender will demand full disclosure of all your outstanding debts so they can deem you a qualified borrower or a significant risk.

More Factors in Buying UK Mortgages

Next you'll want to consider the manner in which you pay back your loan. The repayment method, as it's known, ensures that the lender receives the full balance of the loan by the end of the term, which can be anywhere from several months to 25 years. Through this avenue, you make a regular payment each month that includes a portion of your principal as well as your interest. That means you have the assurance that your load is being reduced each month.

As an alternative to the repayment method, interest-only mortgages have a higher degree of inherent risk but can also save you money. While your monthly payments are reduced, you are also dependent upon some kind of investment vehicle to help you pay off your principal at the end of your term. Your payments cover your interest exclusively, which means paying the balance of your debt depends on the relative success of your investment, be it through an endowment, pension, or ISA mortgage.


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