3 Popular Mortgage options for Modern Consumers

25-01-2016 | Anne Seymour |

OK, so you have decided to get a mortgage.

While this is always good news, you are about to embark on one of the most important and complex financial agreements that you will undertake during your lifetime.

The one thing to remember is that not all mortgages have been created equal, and whether you are applying for your first, second or third it is imperative that you choose one which suits your precise, real-time circumstances as a borrower.

3 Popular Mortgage Options in the Modern: Tailoring a loan to suit your circumstances

With this in mind, we have decided to identify three of the most popular and contemporary mortgage options in the modern age, each of which has been designed for a specific demographic of customers. These include: –

Self-Employment Mortgages

Historically, self-employment mortgages are tougher to become eligible for as a consumer while firms are also known to hedge their bets by requesting three years’ account information and charging higher interest rates. This type of mortgage is becoming increasingly popular in the UK; however, with Saffron Building Society revealing that an estimated 4.6 million British citizens currently work for themselves (while also generating more than £1 trillion for the nation’s economy).

As freelancing becomes increasingly commonplace and lucrative, however, we can expect lenders to become more relaxed and offer a wider range of competitive products to applicants.

Self-build Mortgages

While the UK may be lagging behind Europe and Scandinavia when it comes to the construction of self-build properties, this is still an increasingly popular market in Britain. If you do own a plot of land or hope to demolish an existing home in order to build a new one, however, you will need to seek out a smaller, self-build mortgage that is tailored to your needs. Funds are delivered at fixed intervals during the build, while many packages also include the options of making repayments on an interest-only basis until the project is complete.

Buy-to-let Mortgages

If you have been watching the news recently, you will know that the lower end of the buy-to-let mortgage market has been hit recently by higher stamp duty rates and the eradication of numerous tax advantages. This has been done to regulate the rental market in the UK, but despite this buy-to-let properties and mortgages remain in high demand in 2016. Lenders can offer up to £1.5 million to landlords across 10 properties (as a general rule), while the monthly rental cover must equal at least 125% of your mortgage repayments over time.

Tread carefully with this type of market; however, as growth will be hit hard by new government initiative and only those operating at the luxury end of the market will be able to truly make hay.

About Anne Seymour

Anne is a young webpreneur, interested in all things related to money: earning, investing, saving. She's paid off her student loans and now is looking forward to doing a lot of writing and traveling.

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Recent Comments

  • Pete's Sake

    April 8, 2016 at 8:38 am

    I was lucky enough to inherit my home from my relatives, so I only needed to borrow money to make some repairs/improvements. However, good to know there are different kinds of mortgage options available. I was never interested to learn about mortgages, but now that my kids are all grown up, I’d love to be able to give them at least some advice if they ever decide to buy a home of their own.

    • Ramona

      April 8, 2016 at 11:42 am

      We need to be well informed so that we can teach our children how to best handle money. A lot of people are now in financial distress since their parents didn’t know or care to teach them about money

  • Sylvia

    April 18, 2016 at 7:59 am

    Hello 🙂 I found your website by accident, I was actually looking for information about how to get a second mortgage 😀 Basically, my husband and I live in a duplex, and would like to buy the second apartment (owner decided to sell) so that we would own the whole property, not just half of it. Our plan is to then live in the apartment upstairs and rent the one downstairs.
    So, should we opt for a buy-to-let mortgage? Are there any huge disadvantages we should take into consideration?

  • Rebekah

    May 11, 2016 at 12:23 pm

    I want to know the answers to your question, @Sylvia We are at the moment applying for a second home loan, improve our fully paid 1st house and sell it. We’re not doing this for real estate business. But moving from a rural property to a semi rural house and smaller acreage near the CBD- city, closer to uni and place of work.

    I think, I would opt to choose renting out my first home. But I would double check my applicants for tenancy thoroughly before accepting eligible applicants first. Good luck in your real estate considerations! I wish you and your husband goodwill, favor and success!

  • tabby

    May 16, 2016 at 8:21 am

    Just a curious question. Are the mortgages in UK/Romania being offered by financial institutions only? In my country, for people to own their houses, we usually resort to applying for a loan through a government agency called PAG-IBIG – responsible for at least providing housing to employed/self-employed members. The rates are definitely lower compared to financial institutions and the terms extend to at most 30 years.
    Are there any similar arrangement in your country?
    Anyway, it’s interesting to hear the first type of mortgage mentioned here. I doubt we have something similar here. Or if there are, those who are usually granted such loans are those with established small businesses to guarantee payments. Being a freelancer, banks are still skeptical about the consistency of the person’s income are thus afraid to approve big loans.
    tabby recently posted…Philippine Stock market Performance a Day after the May 9 Presidential ElectionsMy Profile

  • Sarah Chrish

    July 3, 2017 at 6:21 am

    Those are such a useful tips. I was actually talking to my friends about this recently and we did not know where to start so I found your post extremely useful. Thanks!

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