Types of mortgage

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Buy-to-let mortgages explained

Buy-to-let (BTL) mortgages are for landlords who buy property to rent it out. The rules around buy-to-let mortgages are similar to those around regular mortgages, but there are some key differences. Read on for more information about how they work, how to get one and what mistakes to avoid.

Shared equity or partnership mortgages

With a shared equity mortgage or partnership mortgage a lender will agree to give you a loan alongside your main mortgage in return for a share of any profits when you sell your house or repay the loan. Find out how shared equity mortgages work, the different types and who they are suitable for.

Sharia-law-compliant home purchase plans

Sharia-law-compliant home purchase plans help you buy your home in a way that doesn’t involve paying interest. They are complex products and there can be a big difference in what firms offer, so consider getting professional financial advice to help you decide. You also need to get legal advice to ensure your right to live in the property is protected.

Second charge or second mortgages

Second charge mortgages are often called second mortgages because they have secondary priority behind your main (or first charge) mortgage. They are a secured loan, which means they use the borrower’s home as security. Many people use them to raise money instead of remortgaging, but there are some things you need to be aware of before you apply.

What is equity release?

Equity release refers to a range of products that let you access the equity (cash) tied up in your home if you are over the age of 55. You can take the money you release as a lump sum or, in several smaller amounts or as a combination of both.

Lifetime mortgage

With a lifetime mortgage, you take out a loan secured on your home which does not need to be repaid until you die or go into long-term care. It frees up some of the wealth you have tied up in your home and you can still continue to live there.

Equity release help

Firms selling equity release have to give you certain important information to help you decide on whether to enter a scheme. Here’s a summary of what to look out for and what you’ll receive.

Home reversion

With a home reversion, you sell all or part of your home in return for a cash lump sum, a regular income, or both. Your home, or the part of it you sell, now belongs to someone else. However, you’re allowed to carry on living in it until you die or move out, paying no rent. Depending on your age and medical conditions, you might be able to access more funds.

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