New Kinds of Mortgages in the UK
The UK mortgage business has recently changed. Not long ago, mortgages were only available to a man with family and a substantial income. Other people would rent.In recent years, however, the mortgage market in the UK has developed. New lenders have appeared who are providing mortgages designed for normal people that don't fit the old description of a mortgage borrower. The following is a list of the new types of mortgage loans.
Another new mortgage type in the UK is known as the Muslim Islamic Mortgage. There are a growing number of Muslims residing in the UK. Under Islamic law, paying interest is not permitted. For British Muslims this has put them in a difficult position. They must either rent or they must compromise their beliefs to take out a traditional UK mortgage. To approach this matter Muslim Imams have agreed to set types of home loans which have been especially designed for devout Muslims.
Mortgages were originally designed to only be for people with families and reliable employment. They would entirely pay off the mortgage loan throughout their career. Usually a 30 or 25 year mortgage would extend to retirement at 60. Those over the age of 40 had difficulty taking out a loan. The system as it was could not accept that they may actually pay off their mortgage before they planned to retire. Those who had already retired would not be able to get a mortgage. But things are different. Now it's very feasible for the elderly or mature people to buy a new home. Many lenders will now be more than willing to help them, and mortgages for the elderly are fairly common.
Remortgages for people with poor credit records are not uncommon. Some people who have a home loan later find themselves with credit problems. They don't realize it is a problem until they need to Remortgage. Previously, the mortgage lender would have rejected their request for an additional mortgage loan. Today a lot of lenders will be happy to offer them a new loan. The drawback is that the homeowner must pay extra due to the fact that they are high risk.
Equity release home loans are aimed at those that already own a house, but are in need of money. They're perfect for elderly citizens who can't afford retirement costs and nursing care. There are quite a few different types of equity release mortgage deals.
You need to be warned if you are thinking about taking out this type of mortgage. They aren't often recommended by experts that say they're inappropriate for a lot of homeowners. If you have money problems there are other ways to earn money.
Guarantor mortgages are becoming more and more common. Many people, such as first time buyers, have a hard time affording a mortgage payment. Their salary may not be high enough. Or they have surplus debt. A mortgage guarantor is someone that agrees to be responsible for the mortgage payment. If the person getting the mortgage can't pay then the mortgage guarantor will continue with the payments. Usually the person who guarantees the mortgage is the parents of a young buyer. Or it can be another family member. Or perhaps a close friend.
About the writer:
Sam Enright writes on UK personal finance web sites and newspapers including MortgageSorter, a Website that makes Mortgages in the UK easy to understand.
