Types of Mortgage:

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How Do I Prove My Income?: When you apply for a mortgage you will normally have to provide proof of income. However, there are mortgages available, called Self-Certified mortgages, where this is not necessary.
What Happens If I Have No Proof Of Income?: If you are self-employed and cannot provide any proof of income – you will have to self-certify your income. In most cases you will need to provide an accountant’s certificate as proof of income.
What Are Discounted Mortgages?: Discounted rate mortgages take the lenders standard variable rate and apply a discount. By applying the discount it allows the borrower to reduce the interest rate on the loan for a set period of time.
What if I have mortgage arrears?: If you have mortgage payments that have not been made by the due date in accordance with the mortgage deeds, you will have gained a bad credit history on your credit report. This may hinder you when trying to obtain further credit such as a credit card, loan, or another mortgage.
What Happens If I Have Bank Defaults?: If you have failed to meet payments on a credit agreement such as secured loans, unsecured/personal loans, credit cards, store cards or car finances etc, or you have failed to comply with your lender’s requirements, you will be described as having 'defaulted'.

Variable rates Mortgages: - mortgage payments are calculated by your lender on the so-called "Standard Variable Rate". This is based on the monetary "base rate" that is reviewed monthly by the Bank of England.

Discounted variable rates mortgage: - offers a discount on the lender's "Standard Variable Rate" for a time to attract new customers, however beware of redemption penalties.

Advantages: If interest rates fall then you should feel the benefit of a lower mortgage payment each month. This type rarely has any redemption penalties or ties-in costs.

Disadvantages: If interest rates rise, then monthly mortgage payments will increase. No payment breaks or holidays are allowed.

Fixed-rate Mortgages: - these mortgages fix your monthly mortgage payment for a set period of time 2, 3 or 5 years, regardless of the interest rates set by the Bank of England. After the end of the fixed rates period, your mortgage interest rates will generally revert to your lender's "Standard Variable Rate", although some lenders will allow you to take another fixed rates deal.

Advantages: You pay a fixed rates each month for your mortgage.

Disadvantages: If interest rates fall then you will find yourself paying more each month. Most fixed rates deals come with redemption penalties, and some even have redemption penalties outside of the fixed interest rates period. Check any such extended ties-ins.No payment breaks or holidays are allowed.

Capped rates Mortgages: - these mortgages are a cross between variable rates and fixed rates mortgages. Basically your lender sets a maximum interest rates (known as a "cap") which is the highest rates you'll ever have to pay. Generally lenders are prepared to cap rates for 2,3 or 5 years.

Advantages: You know the maximum amount you'll be forced to pay each month. If interest rates fall, you can take advantage with lower monthly interest payments.

Disadvantages: Capped rates deals come with redemption penalties and some have redemption penalties outside the period of the capped rate. Check any such extended tie-ins.In most cases no payment breaks or holidays are allowed.

Flexible Mortgages: - these are the newest breeds of mortgage on the market. Although the degree of flexibility varies from lender to lender.

Advantages: Choose how much you repay monthly take payment holidays Make lump sum payments Borrow back money you've already paid on your mortgage to fund additional purchases. No redemption penalties in general. You can save thousands in interest payments compared to a traditional mortgage if you take the step of combining your current account with your mortgage (so called "all-in-one-accounts").

Disadvantages: The level of flexibility varies considerably from lender to lender. Check how flexible the mortgage really is before you buy

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