Residential Mortgages help you get on the property ladder
We are a whole of market mortgage broker. This however does not mean that we offer mortgages from every UK lender but means that we offer products from a large range of lenders that are representative of those available across the entire market.
A mortgage to purchase your own home
Residential mortgages are used to buy a property you intend to live in. Interest rates on residential mortgages are usually much better than those on other types of mortgages because residential mortgages are seen by lenders as being a safe bet and as most lenders offer this type of product, the high competition drives down rates. Interest is usually calculated daily which again brings down the cost to the borrower.
Currently the highest LTV (loan size compared with the property value) on residential purchases is 95% which is also much higher than the LTV for other types of mortgages. A high LTV can be extremely beneficial to First Time Buyers who can use a minimal deposit to join the housing ladder however lenders will be very strict in relation to criteria on this type of borrowing.
The length of the mortgage (term) will typically be from 5 years to a maximum of 40 years (with certain lenders) although a 25 – 35 year mortgage is usually the norm. An interest only option (where only the interest on the loan is payable and not the capital) is occasionally available up to 50% LTV but this option is rare and in many instances not advisable.
Due to the low level of risk and high competition, residential mortgage providers offer many incentives and lots of choice. For instance lenders can offer options to overpay the mortgage in certain periods of the year so that you can underpay in others (known as a payment holiday), free valuations, no arrangement fees, cashback on completion etc.
Prior to the financial and property crash in 2007/2008 many lenders offered the option on certain products for the borrower to either self-certify or fast track income. This basically meant that income was rarely verified by the lender and as such relied on the borrower stating what they were earning. This type of system inevitably led to abuse and as such virtually all residential mortgages now require full income proof. The requirements can vary depending on the lender and with employed applicants some lenders will simply want to see the last months payslip and be sure that the borrower is in a full time position however most lenders like to see a longer history of at least 3 months or more. Requirements can also vary for self-employed applicants. Normally lenders require at least 2 – 3 years tax returns or SA302s and would prefer to see increasing profits. Odd lenders however will allow just one year’s proof.
It is important to note that the best rates and schemes are available with borrowers who fit into the middle ground in terms of mortgage requirements. Borrowers on the extremes tend to pay a premium for being so.
Residential Mortgages – Property Types
As well as standard properties, we can mortgage:
- Unusual/non-standard construction
- Catteries, stables etc considered
- Flats above commercial property
- Ex local authority including balcony access
- High rise blocks
- Second home or holiday home
- Shared ownership
- Listed buildings
Residential Mortgages – Mortgage Types
- Purchase or remortgage
- Capital raising & debt consolidation
- Products up to 95% LTV
- ERC fee products – fixed & trackers
- Terms from 3 to 40 years
- AVM, drive by & desktop valuations
- Interest only
- Free valuation & legal fees
- Lending into retirement
- First time buyers with family assistance
- Older family members staying in their home with the help of their children’s income
- Combining family resources without additional security
- Joint mortgage but one income to support affordability
- Guarantor mortgages with parents or family members
- Armed forces including help to buy
- Borrowing beyond state retirement age
- Gifted deposits/builder deposits/equity from close family
- First time buyers & home movers
- Age 55+ & above products
- Up to 4 applicants
Residential Mortgages – Credit
- No minimum credit score
- Manual underwriting
- Defaults, CCJ’s, mortgage arrears, unsecured arrears, IVA’s, bankruptcy considered
- Payday loans acceptable
Residential Mortgages – Income
- No minimum period of employment
- Applicants in probation periods
- Agency/zero hours & contract workers
- Self-employed with 1 years’ accounts
- Pension & investment income acceptable
- Ltd company directors using drawings as income
- Retained profit, complex & multiple incomes
- Some benefits considered as income
- Income from abroad