Making UK Mortgages More Accessible
Author: Joseph Kenny

Previously, in the UK, if you wanted to apply for a mortgage to
buy a new home, the amount that would be lent to you would be
automatically tied to how much money you earned. With runaway UK
housing prices over the last decade, and with incomes remaining
fairly stable, this method of calculating how much you could
borrow on a mortgage has become out dated. Today, many new home
buyers need to look for more creative ways to borrow money if
they want to buy a new home in Britain.

The Affordable Mortgage

Probably the most common of the new forms of mortgage is the
affordable mortgage. Unlike mortgage that fixed to your
earnings, affordable mortgages are calculated based on how much
you can afford to repay each month once you have taken into
consideration all of your other expenses. So, for example, if
you have recently bought a new car on hire purchase and will be
making hire purchase payments for the next three years, these
hire purchase payments will be deducted from your salary and
what remains will determine whether or not you can afford to
repay the mortgage loan. UK affordable mortgage loans have
allowed new home buyers to borrow as much as 50 percent of their
monthly disposable income in mortgage repayments, which usually
gives new home buyers a much better chance of buying a new home.


The Flexible Repayment Mortgage

Growing in popularity is the flexible repayment mortgage. As
mentioned, traditional mortgages take into account what you
current earnings are, how much you borrow, the interest rate,
and then calculates, roughly, a monthly repayment that will be
fixed (variable on interest) for the remaining 20 to 30 years of
the mortgage term. Real life, however, is not like that. It is
highly unlikely that you'll be earning the same in 10 years time
as you earn today. A flexible repayment mortgage takes this into
consideration. It allows you increase your mortgage repayments
over time. As such, within parameters, you are able to borrow
more on your UK mortgage than you earn today on the expectation
you'll be earning more in the future.

The Current Account Mortgage

Strictly speaking, the current account mortgage is not a
mortgage at all – it's an overdraft. As such, it is not
restricted by the same lending ratio limits that traditionally
apply when applying for a UK mortgage. Nonetheless, so long as
you are financially disciplined enough not to be overly
concerned with having to live with a large overdraft on a daily
basis, this type of new UK home mortgage can mean the difference
between being able to buy a house now and having to wait until
you have enough of a deposit or a high enough salary to qualify
for a traditional UK mortgage.

The world of UK consumer finance is forever evolving. To try
and respond to recent demographic changes in the UK, and to ever
rising costs of living in the UK, UK credit lenders are having
to be more and more ingenious when it comes to obtaining new
business. As such, if you find yourself in the position where
you simply cannot afford to buy a new home on your current
salary, don't give up, look around and see if you can find a UK
home lender who'll agree to lend you the money to buy your new
dream home on more flexible terms and conditions than was
previously the case.


About The Author: Joe Kenny writes for the UK personal finance
sites http://www.ukpersonalloanstore.co.uk and also
http://www.cardguide.co.uk