Unless a buyer is in the happy position of using cash funds, chances are they will require a mortgage. This is simply a loan from a bank or other financial institution for a proportion of the value of the property they wish to buy.
It is usually possible to borrow up to 90% of the value but a buyer must prove they can meet the repayments so their income will be checked by the lender. It is common for a lender to advance up to 4 times the applicant’s salary.
A mortgage is usually repaid over 25 years at an interest rate linked to Bank of England Base Rates.
There are many different types of mortgage, repayment (where interest and capital is repaid monthly), interest only (where only interest is paid monthly, the amount of the loan must also be repaid at the end of the term) and buy to let (for investors looking to rent out property for investment).
A decision to take a mortgage is an important decision. The wrong type could waste thousands over many years. Thinking about it? Contact our in-house advisors for all the information you’ll need.