New Types of UK Mortgages

New Kinds of Mortgages in the UK

Mortgages in the UK have changed recently. Not long ago, mortgages were only given to a man with family and a good job. Other people would rent.However, recently, the UK mortgage market has made some changes. Mortgage lenders are now willing to offer mortgages especially for everyday people who do not fit the past mortgage borrower description. Here is a list of the new types of mortgages available.

Mortgages were originally supposed to only be for those with families and a stable income. They would completely pay off the mortgage throughout the course of their career. So a 30 or 25 year mortgage loan would extend to retirement at 60. Those over the age of 40 had difficulty taking out a mortgage. The system as it was couldn't accept that they may be able to pay off their mortgage loan prior to retirement. Anyone already retired would have no chance of getting a mortgage. Luckily, that isn't the way things are anymore. Now it's entirely possible for the elderly or mature people to get approved for a mortgage. Most lenders will now be pleased to work with them, and mature mortgages are very common.

Guarantee mortgages are increasingly common. First time home buyers have troubles paying a mortgage. Usually their salary isn't high enough. Or they may have surplus debt. A mortgage guarantor is someone who agrees to be responsible for the mortgage payment. If the person getting the loan stops paying then the guarantor has to make the payments. Often the one who guarantees the mortgage is the father or mother of a younger buyer. Or it may be another family member. Or maybe even a close friend.

Remortgages for people with poor credit records aren't uncommon. Some people who already have a home loan later wind up with poor credit. When they need to Remortgage they realize it is a problem. Previously, mortgage lenders wouldn't have given them another home loan. But now a lot of lenders would be happy to help them with another mortgage loan. The catch is the borrower has to pay extra money because they're considered a higher risk.

Equity release mortgages are for families who already own a home, but are needing money. They are perfect for senior citizens who have retirement and nursing care costs. There are quite a few types of equity release deals.

You need to be warned if you are considering taking out this kind of mortgage loan. They are not highly favored by some experts that say they aren't suitable for many people. If you need money there are other ways you can earn money.

Another new mortgage that has come up in the UK is known as the Islamic mortgage. There are a growing number of Muslims residing in the UK. However, Islamic law dictates that the payment of interest is not permitted. For many Muslims in Britain this has resulted in an uncomfortable situation. They must either rent or go against their beliefs and get a regular UK mortgage. In order to approach this problem Muslim Imams have agreed to certain types of home loans which have been especially created for Muslims.

About the author:

Sam Enright writes on UK personal finance web sites and newspapers such as MortgageSorter, a Website that makes Mortgages in the UK easy to understand.

Sam Enright is a content writer for various Finance newspapers in the UK, including http://www.mortgagesorter.co.uk. Mr. Enright makes it a point to make all things that are involved with mortgages in the UK easier to make sense of and understand, including guarantor mortgages