A residential mortgage is essentially a loan designed to help the borrower purchase a house  where an applicant’s willing to living with the property in question put up as security

Types of Residential Mortgage

  1. Fixed Rate Mortgages:
    With these plans, the rate of interest you pay is fixed for a set term (generally two, three or five years even 10 years ). This means you can budget efficiently and plan well, knowing that your monthly payments won’t change over the course of the fixed term.
  2. Variable Rate Mortgages:
    With a variable rate mortgage, you’ll pay what is known as the lender’s standard variable rate (SVR) of interest, which changes monthly at the discretion of the lender, tracking general economic changes in the country and in the lending market.
  3. Tracker Mortgages:
    The interest rate you pay when you take out a tracker mortgage will vary monthly as well but will directly track changes in the Bank of England base rate, staying a set percentage above it at all times.

How do lenders check I can eligible a residential mortgage (basic underwriting criteria)?

  1. Household Income
    Lenders will work out your household income – including your basic salary and any additional income you receive from a second job, freelancing, benefits, commission or bonuses.
  2. Soft facts & Hard Facts about you
    It’s mainly your life style pattern and your attitude of financial risk, your employment/ self-employments types and length of service
  3. Credit profile
    it is your character of your credit worthiness (your previous conduct with the lenders)
  4. Your Profession
    Some lenders prefer professional clients more often than others due to various reasons
  5. Residence status in the UK
    Most of the specialized lenders prefer Indefinite Leave to Remain in the UK status for the applicant
  6. Source of funds
    how is your deposit originated
  7. Background Check
    Your previous conduct with the lenders & full AML checks (Credit & Fraud Bureau checks)

Getting a residential mortgage is someone life long commitment (Average 25 Years) and a mortgage is a type of secured loan, which means it’s secured against the property you buy. The lender’s interest in the property is noted with the title deeds at Land Registry. This gives them the ability to repossess the property if you can’t maintain the payments. You could also lose your deposit, depending on the sale price at the time of repossession.it is essential that getting professional advice before you apply for residential mortgage.

Sydney IFA guide you through residential mortgage journey