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23rd Mar 2019

Explained: What is A Mortgage?



Explained: What is a Mortgage

Simply, a mortgage is a loan which people can use to buy a property or land. Ordinarily, the loan period runs for around 25 years, but this can be longer or shorter, depending on the requirements of each individual.


In return for the loan, the lender will take possession of the titles to the property or land you have purchased with the borrowed funds, to ensure you repay your loan. Once the appropriate amount plus interest has been repaid, the lender will return title deeds and you will have full possession of your property. If you miss mortgage payments, you will be in arrears and may end up in default if you continue to fail to make payment. In this case, the lender may take possession of your property or land, and you will lose ownership rights over the property or land. The lender will then sell the property or land, and get the loan amount back.


Working out what you can afford?

When working out what you can afford, it is advisable not to stretch yourself, and take into account the costs of owning a home, such as regular household bills, council tax, home insurance and contents insurance, and general upkeep and maintenance.

In order to obtain a mortgage, lenders will want to see proof of your income, and other expenditure like bills, child maintenance, and other personal expenses. Lenders will also want proof that you can repay the loan if interests rates rise, so a reasonable amount of leeway is required when deciding what you can afford to repay.


What mortgage can I get?

This is a big question. First, we would need to discover what type of buyer you are. Are you a first-time buyer, experienced landlord, home mover, the list is large? Once we have the answer to this question, we can help with the type of mortgage you need.


What is a first-time buyer?

A first-time buyer is an individual who has never had finance for a property before. The individual may be entitled to greater discounts and government schemes, in order to get on the property ladder. For example, the government offers ‘help-to-buy’ schemes for first-time buyers which offer bonuses on capital saved when it is used to buy property.


I’m self-employed, can I get a mortgage?

Yes, you can. Many mortgage lenders have products available to self-employed borrowers as long as you have your SA302’s for the last…… years, then you will be able to get a mortgage.


I have a CCJ/been bankrupt, can I get a mortgage?

Whilst it may be more difficult, there are mortgages for people who have/had adverse credit.


Why should I use a mortgage broker?

Mortgage brokers can compare mortgages from ‘the whole market’ and also look at various products from different lenders. They also offer a guide through the process of getting a mortgage and have a duty to do the best work for you possible. They also may have access to mortgages which are not offered directly to customers, which may be better products than others available directly to customers.          

Mortgage brokers do not offer advice on properties to buy, and this will be made clear to you at the start of any business with a broker. This is per FCA regulations.


Why Use YourPropertyWizard?


At YourPropertyWizard we have access to the best Mortgage Brokers in Glasgow and across Scotland. By using our free of charge referral service, you can get preferential rates and the assurance that your mortgage application will be in the best hands. Use our contact form today to get in touch!

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