Mortgages.....why so many different types?

[StudentGal]

Hi,

My boyfriend and I are looking at buying a house together soon but we are totally baffled by the concept of all the different mortgage types out there. Is there anyone who can explain them in plain English to me? Also, does anyone know how far mortgage companies will bend on the 3 times your earning rule as house prices in the UK compared to salary is just not viable unless we buy a house in a hell hole somewhere :(

Thanks in advance

[VannaB]

Hi

Book an appointment with an independent financial advisor. Make sure they are independant and not tied to any particular mortgage provider. They will look at your finances and recommend the best mortgage for you.
I did this recently and she checked thousands of mortgages that seemed to offer good deals, weeding out those with long lock-in periods/high set up costs/penalty charges etc, taking all the hassle away from me. She researched it using a computer programme in front of me and told me what I can and cannot expect to borrow.
They get paid by the mortgage provider-you pay nothing.

There are mortgage providers who loan more than 3 x your salary but they do need wage slips, bank statements etc to make their judgement with. Your Financial Advisor will help you with this.

Good luck!

[Hawkwalk]

There are some now offering 5 or 6 times your salary but be aware of increasing interest rates!!! Do as VannaB says.

[Nether Edge]

REPAYMENT: each month you pay interest + part of loan. By end of mge term, all loan repaid.
ENDOWMENT: each month you pay interest only. Loan all unpaid until end of mge term. You also pay monthly endowment assurance premium into life policy which matures at (or before) term ends. Ideally its maturity value then pays off all loan- but this depends on investment performance and is not guaranteed (except that, if you die during term, minimum guaranteed death benefit is paid; this is usually set equal to loan).

[StudentGal]

Thanks very much guys :) I appreciate the help

[naz_nomad]

I was with my Lloyds TSB manager recently and was quite surprised to learn they provide a ''Muslim '' mortgage.

Apparently, their religious beliefs don't allow them to have interest on money ... you learn something every day ...

[Nether Edge]

naz_nomad: true, although the beliefs are founded on a mis-reading of the Five Books of Moses which don't apply to Moslems anyway.
The idea is that the "lender" becomes the property's legal owner and creates a tenancy in favour of the "borrower". The latter pays "rent". All of this is entirely artificial, of course, but it seems to be Sharia-compliant.

[Mammar]

I can give you the name of a good independent financial advisor who has always been great for me.
But first, get that high-paid job! x x

[StudentGal]

Well thanks very much Mum :p ^^

[winny]

well i know but im not telling you as you didnt ask me first