New Types Of Uk Mortgages

New Mortgage Types in the UK

The mortgage market in the UK has changed in recent years. Not so long ago, mortgages were only given to a man with family and a steady income. The other people would have to rent.Recently, though, the UK mortgage market has matured. Lenders are offering mortgages that fit the needs of ordinary people who do not fit the old idea of a mortgage borrower. Here are just a few of the new mortgage loan types.

Poor credit Remortgages are more common than you may realize. A number of homeowners who presently have a home loan later find themselves with poor credit. They don’t realize it’s a problem until they go to Remortgage. In the past, the mortgage lender would have refused their request for a new home loan. Now many lenders are delighted to give them a new mortgage loan. The catch is that the homeowner will pay more money because they’re considered high risk.

Guarantor Mortgages are becoming more and more common. Many first time buyers have a hard time managing a mortgage payment. Their salary might be low. Or they may have way too much debt to be able to buy a home. A mortgage guarantor is someone who commits to being responsible for the mortgage payment. If the person taking out the mortgage quits paying then the guarantor will make the payments. Most likely the one who guarantees the mortgage is the mother or father of a young buyer. Or it can be another relative or immediate family member. Or maybe even a close friend.

Mortgages were originally designed to only be for those with families and a decent income. They would entirely pay off the loan throughout the course of their career. Therefore a 30 or 25 year mortgage would take them to retirement at 60. Anybody older than age 40 had a hard time taking out a mortgage. The system didn’t believe that they might be able to pay off the mortgage prior to them retiring. Anyone who was already retired had no chance of getting a mortgage. Luckily, that isn’t the way things are anymore. Now it’s entirely possible for the elderly or mature people to get approved for a mortgage. Many lenders will be more than willing to deal with them, and mortgages for old people are quite common.

Another new type of mortgage available in the UK is called the Muslim Islamic Mortgage. There is a large group of Muslims in the UK. However, Islamic law says that the payment of interest is prohibited. For Muslims in the UK, this has resulted in a difficult position. They can either rent or they can compromise their beliefs to take out a regular UK mortgage. To address this problem Muslim Imams have settled on set types of home loans which have been exclusively designed for Muslims.

An equity release home loan is for families who already bought a house, but are wanting to raise some money. They are really aimed at elderly citizens who have to pay for retirement and nursing care costs. There are quite a few different types of equity release mortgage deals.

You should be careful about this kind of mortgage. They are not highly regarded by experts who claim they’re not suitable for most people. If you have got problems with money there are many other ways you can raise money.

About the author:

Mr. Sam Enright writes on UK personal finance websites and newspapers such as MortgageSorter, a Site that makes UK mortgages clear.