Residential Mortgages.
Are all mortgages the same?
Nope. There are some clear lines in the sand regarding what lenders’ money can be used for. The correct mortgage for the job depends on what you intend to do with the property. If you intend to live in it, then you need a residential mortgage.
Who are Residential Mortgages for?
Because residential mortgages are designed for properties that people live in, you will find that mortgage lenders have set criteria on the type of property against which they will lend. Properties that are ‘mixed use’ i.e. perhaps having a shop and a flat on the same title, will generally not be accepted as the commercial element causes lenders to have concerns about how easily the property could be sold in the event of repossession.
A good mortgage adviser who has access to the whole of the market may be able to find a specialist lender who can assist. 😉
Protection and Requirements
A residential mortgage in the UK is regulated by the Financial Conduct Authority, meaning you, as the mortgage holder, benefit from the protection afforded to consumers under the Financial Services Compensation Scheme and Financial Ombudsman Service.
To deal in these types of mortgages you have to be authorised by the FCA and hold certain qualifications – you can't just buy one from your mate down the gym (unless they are a qualified mortgage adviser of course!)
Navigating Residential Mortgages
It is always best to remember that whilst no mortgage lender wants to repossess someone’s home, they do make a decision as to how easy and quickly they think they would be able to sell it, should the worst happen.
Remember, banks and building societies offering mortgages do so to make money, so their thought process is generally one of head rather than heart.
So, if you are looking to buy a new home or change your rate and intend to live in the property (even if it is a second home) then it is a residential mortgage that you need.
Let us help with all your residential mortgage queries
Check out our Frequently Asked Questions below to find answers on some of the most common questions that we get asked.
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