Niche mortgage products
Sub primeA sub-prime mortgage is aimed at borrowers who do not fit the typical lending criteria of high street mortgage lenders. The most common reason for this is where the borrower has had some credit problems in the past that makes them ineligible for a standard (or prime) mortgage deal - such problems include missed loan payments, County Court Judgements or bankruptcy.
A borrower in this position is considered by mortgage lenders to be a higher risk and therefore interest rates on sub-prime deals can be a lot higher than usual, depending on the severity of the credit issues.
Self CertificationA self-certification mortgage is one where the borrower certifies his or her own income, rather than provide proof of it to the mortgage lender for assessment.
Self-cert deals are designed to help self-employed people and people with multiple sources of income who aren't able or would struggle to provide proof of their full income. However, since the credit crunch, these deals have all but disappeared due to the risks involved in banks lending money without proof of the borrower's income
Green mortgagesThe term 'green mortgage' can mean a range of things, but generally it refers to two types of mortgage. The first is a mortgage deal that offers some environmental/ecological benefit or incentive - a lender may, for example, plant trees on your behalf, or make a donation to a charity or project. Interest rates on such green mortgage deals can be high relative to standard deals so you may be better off getting the best deal you can and then making your own contributions to green causes.
The second type is a deal that is aimed at people buying, building or renovating an eco-friendly home - certain lenders may be willing to lend on such projects where other lenders wouldn't.
Self-buildA self build mortgage is aimed at people requiring finance to build their own property as opposed to buying an existing one - they can also be suitable for renovation projects. The money is typically released in stages as the build progresses with the mortgage lender visiting and assessing the build at each stage - depending on the deal, money is released either before or after each stage.
Some new build deals will insist that you already have the plot of land on which to build, whilst others will provide finance for that too.
Due to the risky nature of building your own home, it is essential that you have a detailed budget and good cashflow before embarking on a project and securing finance.
New buildFor many people, buying a new build property is a great way to get on or move up the housing ladder. A brand new home can give you the freedom to make it your own and it should give you fewer structural problems than an old or period home.
However, not all lenders will lend on new build properties, particularly new build flats and those that do will have specific limits on how much you can borrow compared to the property value. If you're buying a new build property, it's important to make sure that you can secure the mortgage you need before committing to anything
There may be certain offers available from the house builder or developer and you may be eligible for Government home ownership schemes.