Today Lan Shajun will continue to introduce to you the issues related to home loans in the UK and help you understand all aspects of UK home loans!
1Lender requirements
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Regardless of whether they work and live in the UK or not, with or without a visa, investors can get a loan to buy a house in the UK.The British government has not imposed restrictions on non-British citizens buying houses in the UK. Buyers do not need to have residence status in the UK, nor do they need to have a British source of income. If you use domestic income and tax payment certificates, you only need to translate them into English, so you don’t have to worry about not being able to get a loan based on your overseas income. 2 Materials required for loan application · Personal information · Real estate information · Income and expenditure · Assets and liabilities · Credit history and proof of wealth source #{72 } 3 At what stage of the house purchase should you start contacting a loan consultant? It is recommended that you should consult a loan consultant from the stage of planning to buy a house. A loan consultant can evaluate your salary and income level and other current conditions, and issue a Loan Letter of Intent (AIP) (Agreement In Principle) to comprehensively evaluate your financial status and loan ability. You can then estimate the total price of the property you can purchase based on the maximum loan amount. At the same time, the loan letter of intent can explain to the seller or real estate agent your serious attitude towards purchasing and your ability to actually afford the value of the property. 4Specific loan steps
1. Screen bank loan products and loan interest rates: Loan consultants help you select the most suitable and preferential loan solutions among many banks# {104}
2. Prepare and submit materials: Common materials required by banks include: passport, visa, proof of address, salary details, salary card statement, Employment certificate, other bank card statements, tax payment certificate, personal credit report, deposit certificate, etc.According to the requirements of the bank you choose, prepare all the materials and submit them.
Formal loan application takes about 1-4 weeks for local users in the UK and 2-3 months for overseas customers, but the time may vary according to the customer's application The level of difficulty varies.
3. Get preliminary feedback results: After receiving your materials, the bank will give you a preliminary evaluation result, which is the initial loan amount.
4. House evaluation: Before handing over the house, a third party factory will ��The appraisal company evaluates the value and quality of the property you are purchasing and produces an appraisal report.
5. The bank gives the final mortgage amount: After the evaluation report comes out, the bank will determine what you can ultimately afford based on your qualifications and the evaluation report in the previous step. How much money to borrow.
6. Home loan: Before you settle, the bank will make a loan, get the loan, pay the down payment, and then the lawyer and developer can arrange for the house to be collected. .
5: Loan ratio and term
1. Residential mortgage, owner-occupied loan The ratio is usually 4-5 times the annual income before tax. With good qualifications, you can get a loan of up to 90% of the house price
2. Rental loan Buy to let For mortgage, the bank will evaluate the rental income of the purchased property to determine your loan amount. Investment loans can obtain about 50%-75% of the house price. They cannot be occupied by oneself, and the interest rate is higher than that of owner-occupied loans.
Loan term: The length of this parameter determines The amount of monthly repayments may affect the success rate of the loan.
In the UK, the general mortgage loan term can be up to 35 years, but more people choose the 20-25 year term.In addition, most mortgage loans must be completed before the applicant reaches the age of 65, but some banks have also raised the age limit for borrowers to 85.
6: Loan interest rate
1 Fixed interest rate: 2, 3, and 5-year fixed interest rates It is a common choice
Advantages:
1. It will not be affected by changes in external interest rates#{ 50}
2. Fixed monthly payment, easy for financial planning
3. Low pressure
Disadvantages:
1. If the economic situation is not good and interest rates decline, profits will not be made
2. Generally, within a fixed period, overpayment will be restricted#{ 64}
3. After the term ends, you often have to re-mortgage and then pay fees
2 Floating interest rate:
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1. Tracker: Tracking interest rate, which changes with the BOE benchmark interest rate of 4.25%, plus x% on this basis
2. Variable: Reference benchmark interest rate , the specific decision is made by the lender
Advantages:
1. If the external interest rate is lowered, you will benefit immediately# {86}
2. If it is a floating interest rate throughout the loan period, most of them have no or very few restrictions on overpayment
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Disadvantages:
1. If the external interest rate rises, the monthly payment will increase immediately
# { 101}2. Always pay attention to changes in external interest rates3. High pressure and no sense of security
#{109 }In general, loan interest rates in the UK are lower than in China.Depending on the bank, the loan interest rate is generally 3.5%-4.5% plus the Bank of England's base interest rate.7: Loan repayment method
Different from China, the UK starts repaying the loan after the house is handed over, and the term is 25-35 years.
Method 1. Repay the capital: Pay the monthly interest and principal together
Method 2. Interest only: Only pay the interest every month, and the rent can basically cover it. This is also the vast majority. The repayment method that people will choose
can be resold and then paid off the principal + cash in the appreciation. Some will repay x% in advance, but there will be a penalty for the excess.
8: Other loan-related fees
· Loan consultant fees
#{ 23}· Bank product fees, ranging from a few hundred pounds to 2% of the loan amount, can generally be added to the total loan amount;· House appraisal fees, determined according to the property price
#{ 27}· Lawyer fees are divided into bank lawyer fees and customer lawyer fees. Usually the customer has to bear the bank lawyer fees, depending on the specific situation
