What you need to know about home loans:
First of all, acquisition of dwelling premises is an especially important and responsible step that requires preparation and good consideration of even the most insignificant details. In order to acquire your own dwelling premises, you must know that your initial contribution and credit history will be particularly important. Later you will need to make every effort when searching for dwelling premises, applying for a bank loan, etc, so it is useful to apply to a professional loan broker who will help you to find dwelling premises (after evaluating your needs and financial resources) and the best bank to get a loan. As for the loan, you must remember that there are several types of loans and it is particularly important to select the right option and not to “grab” the cheapest one. We provide the main types of loans below:
- Repayment Mortgage
- Interest Only Mortgage
- Buy to Let
If you select this type of a loan, you will make monthly payments to a lender for capital and loan interest and the latter will calculate your monthly contributions. Contributions depend on the amount borrowed, period for which a loan is taken (usually 25 years) and interest rate.
It is important to know that if you comply with payment deadlines and make payments in due time, you will have a guarantee that you repay a loan at the end of the period agreed.
Interest Only Mortgage
This type of a loan is suitable for those who are looking to the future. It is not a secret that prices of real estate are growing; therefore the price of a house may be rather greater after several years. If you select this type of a loan and pay only interest (for money lent) to a lender on a monthly basis you will earn from the difference of the house price but will remain in debt of the same amount.
It is necessary to know that at the end of the loan repayment period your lender may ask you to present certain documents, for example: investment plan, fund allocation policy, individual savings account (ISA) plans, but there are cases when loan repayment plan is left in the hands of a borrower.
Buy to Let Mortgage
This type of a loan is rather clear. It is a form of investment in dwelling premises when you purchase a house (usually by using home loan) and later lease it. This loan option can be called a business the owner of which you become, being indebted for the property into which you have made an investment.
What you should know about repayment of a loan:
After selection of a loan, type it is also important to decide on a loan repayment method. Do not be in a hurry, consider everything well and familiarize yourself with all possible options:
- Fixed – a loan repayment method when, during the whole agreed period you make payments by applying the same fixed interest rate;
- Tracker – this loan repayment method is based on the fact that your interest reduces and increases subject to bank interest rates;
- Discounted – this loan repayment method offers a small discount on standard interest rates established by a lender;
- Flexible – it is a loan repayment method when your monthly payments are changing;
- Capped – it is a loan repayment method when during the whole agreed period your interest rates do not rise above the set/ agreed amount.
- Consultations on issues of getting a loan in the United Kingdom;
- Assistance when searching for a suitable place to live;
- Assistance when applying for a loan.
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