Residential mortgages are loans acquired for buying a residential property, this loan cannot be used to buy a commercial property or a rent-out property. Property bought from this loan has to be used by the one who is taking out the mortgage, for buying a living space for their personal use. There are different entities providing residential loans in the name of residential mortgages, such as banks or building societies where the house is located.

The loan money has then to be paid back in the shape of instalments within the defined time. These loans are secured against the residential property you own or will own shortly. If you fail to pay back the residential mortgage money, the property would ultimately be transferred to the lender.

How long does a residential mortgage in UK last?

The terms for a residential mortgage have lengthened over time as more people are opting to take out a residential mortgage. The term for repayment now spans over 30 years or more. Although longer terms make it easier for you to pay back the mortgage amount. But the extended term also brings about a surge in the interest rate. Longer mortgage term does make monthly instalments affordable but the overall mortgage cost is much higher due to high-interest rates. Hereby, if you have the option of keeping the mortgage term shorter, you'll be saving money in the longer run.

People often extend the term even longer while remortgaging a residential property for ease in the monthly payments. However, if you keep the span shorter, you'll be saving a handsome amount by cutting down the interest rate and extra instalments.

Size of deposit for a residential mortgage in UK

To qualify for suitable residential mortgages rates, you would at least need to deposit 30-40% of the property's value. There are private lenders who might offer residential mortgages in UK even if you only deposit 5-10% of the amount. However, most lenders are inclined towards borrowers who pay larger sums as deposit money to lower the risk. Naturally, the amount you'll be borrowing after the deposit would be less and the equity of the mortgaged amount in the property would be more.

Types of residential mortgage

  • Fixed rate mortgage
  • Tracker mortgage
  • Variable rate mortgage

There is a lot of paperwork involved in applying for a residential mortgage. Loans Desire makes this complicated step easier for you by helping you out at every step to get the best residential mortgages. Additionally, we also assist you in the conveyancing process. You'll find coverable and the most competitive interest rates while applying for a mortgage through Loans Desire.

Company : Loans Desire

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