What is a Mortgage?
A Mortgage is a loan taken out to buy property or land.
Most run for 25 years but the term can be shorter or longer – up to a maximum of 40 Years. The loan is ‘secured’ against the value of your home until it’s paid off usually by monthly payments.
If you can’t keep up with the repayments the lender can repossess (take back) your home and sell it so they get their money back.
Who can get a Mortgage?
Anyone over the age of 18.
What do you need to get a Mortgage?
First of all you will need a deposit. 5% of the properties value as the minimum. You can then get a 95% Mortgage, however these 95% Mortgage are very rare and it is common practice to need at least a 10% deposit in order to attain a 90% Mortgage.
There are some exceptions, the Government has introduced various schemes like shared ownership to encourage property ownership amongst those who wouldn’t otherwise be able to get on to the property ladder the traditional route.
With Shared Ownership, you own a share of the property and the housing association owns the remaining shares which you pay rent on. You will pay both a Mortgage and rent until you can buy out all of the shares and own 100% of the property.
You need payslips, Bank Statements, Proof of Address, Tax Returns and/or a contract dependent on your employments status i.e self employed, contractor, full time etc.
Fairly Good Credit
Credit isn’t the be all and end all as many people with extremely poor credit have managed to attain Mortgages. However, those with bad credit are on extremely high interest rates due to the risk they present. The better your credit, the more options you have (lenders) and the lower the interest rate you will be on when it comes to your monthly payments and value for money.
If I’ve left any stone unturned and you have any further questions, feel free to drop me a message via the “Contact Me” page. Remember you can also search a key word at the top right which may pull up various other posts that can answer your question.