What is a residential mortgage?

A residential mortgage is a loan available from lenders such as banks or building societies which allows you to purchase a home. Residential mortgages are the most common way of buying a home in the UK as most people do not have enough funds to buy a property outright. There are many types of residential mortgages available which differ from each other on factors including interest rates, repayment methods and loan sizes.

With a residential mortgage the home must be used as a residence by the borrowers, not rented out to tenants or used for commercial purposes.

Deposit

Residential mortgages require a cash deposit, typically between 10-30% of a home’s value.

For example, a mortgage for a £200,000 home would likely require an upfront deposit of anything between £20,000 and £60,000.

Some residential lenders could ask for less than a 10% deposit to entice first-time buyers, and the government’s Help to Buy scheme means those who qualify only need to stump up as little as 5% of the value of your home.

What kind of a borrower are you?

Residential mortgages can be tailored to fit the needs of different home buyers and our expert advisors at JMS Buy to Let Business can help you.

Remortgaging? – If you already have a mortgage, enquire with us for changing to a new one which could get you a better deal on your monthly repayments or give you an opportunity to consolidate your debts under a better rate of interest. It could be worth moving from a fixed rate plan to a variable or tracker mortgage to seize better rates, or vice versa for security.

Moving home? – You can either take your existing mortgage with you to the new property, a process commonly referred to as ‘porting’ a mortgage, or you can get a new one. Porting a mortgage is like remortgaging with your existing lender. Getting a moving home mortgage could give a better deal, but if you are leaving your old mortgage before its expiry, you might have to pay penalties.

First time buyer? – As a first time buyer this will likely be your biggest financial commitment yet. So before taking out a mortgage it’s important to make sure your credit score is in good shape, your deposit is as big as you can afford (if you need more money, consider the Help to Buy scheme) and that you can afford the monthly repayments.

If you wish to take out a variable or tracker mortgage make sure you’ve budgeted for potential rate rises. To know you can afford your repayments it could be sensible to use a fixed rate mortgage until you’re secure.

You are well advised to get your mortgage sorted out before you even start looking for a house – so you know what you can afford. This is called getting a mortgage approved ‘in principal’ and indicates that the mortgage lender thinks you are a credit worthy person that they are prepared to lend to.

Contact our mortgage advisors today on 0203 637 6206 who will liaise with our approved list of lenders on your behalf to find the right kind of mortgage that suits both your own circumstances and the type of property you are looking to buy, allowing you to proceed with the purchase process.