Before, if you wanted to buy a new home in the UK, you had to get a mortgage. The amount you were given was automatically based on how much money you made. With UK house prices going through the roof in the last ten years and incomes staying about the same, this method of figuring out how much you could borrow on a mortgage is now out of date. Many people who want to buy a new home in Britain today have to find more creative ways to borrow money.
The Reasonably Priced Mortgage
The affordable mortgage is likely the most common of the new types of mortgage. Instead of being based on how much money you make, affordable mortgages are based on how much you can afford to pay back each month after all of your other bills are paid. So, if you just bought a new car on hire purchase and will be making hire purchase payments for the next three years, these hire purchase payments will be taken out of your salary, and what's left will show if you can pay back the mortgage loan or not. Affordable mortgage loans in the UK have made it possible for first-time buyers to borrow up to 50 percent of their monthly disposable income. This gives first-time buyers a much better chance of being able to buy a new home.
The Mortgage with Flexible Payments
The flexible payment mortgage is becoming more and more popular. As was already said, traditional mortgages take into account your current income, how much you borrow, and the interest rate. They then figure out a monthly payment that will be fixed (depending on the interest rate) for the next 20 to 30 years. But that's not how things are in real life. It's not likely that you'll make the same amount of money in 10 years as you do now. A mortgage with flexible payments takes this into account. It lets you make bigger payments on your mortgage over time. So, within certain limits, you can borrow more on your UK mortgage than you make now if you think you'll make more in the future.
The Mortgage on the Current Account
The current account mortgage isn't really a mortgage at all; it's more like an overdraft. As a result, it is not limited by the same limits on lending ratios that usually apply to a UK mortgage. Still, if you are financially responsible enough to not worry too much about having to live with a large overdraft every day, this type of new UK home mortgage can be the difference between being able to buy a house now and having to wait until you have enough of a deposit or a high enough salary to qualify for a traditional UK mortgage.
The world of consumer finance in the UK is always changing. Because of recent changes in the UK's population and the rising cost of living there, UK credit lenders are having to get more and more creative to find new customers. So, if you can't buy a new home on your current salary, don't give up. Look around and see if you can find a UK home lender who will lend you the money to buy your new dream home on more flexible terms and conditions than before.
