Mortgages

Let’s have a look at some of the finance options available – keeping in mind that we will explore these in much greater detail when you get close to buying.

Standard Variable loan

This is the most common loan. You make regular payments based on an interest rate that the bank may vary up or down. You can pay extra money off the principal owed and, if you need to, you can access that extra money in the future – it’s called a redraw facility.

Many standard variable loans can be split, so some of the amount owed may be subject to a variable interest rate and some to a fixed rate, or some may require payment of principal and interest and some interest only.

Fixed rate loan

You may be able to negotiable a fixed interest rate for part or all of your loan. The interest may be fixed for 2, 3 or 5 years, during which time the rate cannot go up or down.

Basic loans

These vary from lender to lender, but basically they are no-frills loans. Costs are kept down but so are the benefits.

Line of Credit

These loans can be applied to your property and also give you access to additional funds. You only pay interest on the funds you use. Most line of credit loans require you to pay interest only, but you can pay off the principal amount at any time.

Professional Package

You may be eligible for a reduced interest rate due to your employment or your borrowing history.

Lo Doc Loans

These can be useful for people who may not have years of taxation returns but want to show a lender that they earn enough money to cover any potential debt.

Non-Conforming Loans

These are for people in special circumstances – for example, they may have a poor credit history, they may have just changed jobs, or they may be struggling to convince their bank they can meet potential repayments. Non-conforming or specialist loans usually have a higher rate of interest.