When borrowers are taking out a mortgage, mortgage lenders are responsible for providing them with the funds for their property loans. It is a legal requirement to pay back the mortgage lender, along with the interest added, over a set period of time for the privilege of borrowing a large sum of money from them.
What are Mortgage Lenders?
There is a plethora of mortgage lenders on the market, including banks, building societies, online lenders and other specialist companies (in some countries, credit unions can also supply mortgages). Certain mortgage lenders will suit some homebuyers more than others, but the best mortgage lenders are generally those which offer low interest mortgage rates combined with flexibility over monthly repayments. It is recommended that any borrowers thinking of taking out a mortgage take time to find the best deal possible, as switching mortgage lenders by remortgaging at a later date can be costly.
Mortgage Lenders for Bad Credit
Mortgage lenders cater for borrowers in all financial situations. Mortgage lenders for bad credit are becoming prominent due to the state of many potential homeowners’ finances these days. Bad credit mortgage lenders will qualify a borrower for a mortgage even if they have a history for missing loan repayments on previously held debt. Lenders will charge much higher interest rates compared to mortgages intended for those with a good credit rating, but competitive deals can be offered by bad credit mortgage lenders.
Shared Mortgage Lenders
Homebuyers may consider approaching a shared mortgage lender as one affordable option. Shared mortgage lenders work together with the government to help those struggling get onto the property ladder by offering shared ownership mortgages to purchase a portion of a property, while paying rent on the remaining share owned by a housing association.
Right to Buy Mortgage Lenders
Alternatively, those currently renting public sector accommodation may be given the opportunity by right to buy mortgage lenders to purchase their home at a discounted price. A right to buy mortgage lender assesses this based on the number of years a tenant has been paying rent for a property, which can lead to a large sum being discounted off the price if they have lived there for many years.
Commercial Mortgage Lenders
Mortgages for those in business are more of a niche market in terms of what mortgage lenders offer. A commercial mortgage lender can help business owners purchase premises for their commercial ventures. Specialist commercial mortgage lenders give business advice, and are usually flexible on providing quality deals on commercial mortgages.
Buy to Let Mortgage Lenders
Property investors who need assistance to purchase a property in order to rent it out should look to buy to let mortgage lender or mortgage brokers. A buy to let mortgage lender will, in most cases, offer buy to let mortgages to those that have satisfied the lender’s criteria of having a good credit history, a large deposit, and a guarantee that the property will return a substantial rental income. These mortgages will usually be tracker mortgages or fixed rate mortgages as these mortgage types allow better prediction of future cash flow.
Self-Employed Mortgage Lenders
Probably one of the least common mortgages offered is aimed at the self employed. Though standard mortgage lenders might be wary, specialist self employed mortgage lenders will help a self employed borrower purchase their home if they can prove they have the necessary income to make the loan repayments. Typically, a self employed mortgage lender will also require potential borrowers to show at least two years’ worth of tax returns, and evidence of any future work lined up. It should be remembered, however, that due to offering mortgages to those that might not normally qualify mortgage fees can be high with this type of lender.
The Council of Mortgage Lenders
Representing an entire 95% of mortgage lending in the UK is the Council of Mortgage Lenders. It is an industry body, its members comprising of lenders who want to promote sustainable housing finance. The Council of Mortgage Lenders includes a directory of its members which can be useful for any borrowers wishing to search for and compare mortgage lenders to source the best deals.