Mortgages come in all forms and sizes, and some of them are not your usual types of mortgages. When the situation calls for a mortgage of the unusual kind, you’ll need to consider specialist mortgages instead. There are many types of specialist mortgages and mortgage firms may have the same or different mortgages.
Some companies have the self-build mortgage, development finance mortgage and second charge mortgage. To explain them further:
- Self-build mortgages are mortgages where the money being lent is released in portions contrary to the standard mortgage. The money is released as the home, which is still being built, advances. Depending on the lender, the issue here is that you’ll also need to have some starting capital. When beginning to make a home, you’ll first pay for the labour and materials initially used. After that, a surveyor comes and checks the work. If it is satisfactory, the lender will reimburse you the money you spent initially. Some lenders may even allow you to pay up early.
- Development finance mortgages are self-explanatory. These mortgages are for developers of land that need money to start their projects. Say you own a large tract of land, and you’re looking to turn it into a subdivision, but you need to develop it for future sales in the market. You can borrow money from the bank and use it to improve the land by levelling the property and adding roads and streets. They put up the property for mortgage and sell the land to people looking for a place to build their new homes. After most of the property is marketed as the developer pays off the mortgage, he’ll be able to sell off the remaining portions and keep the money all to himself.
- Second charge mortgages refer to mortgages lent to those who already have a mortgage to pay. Mortgaging again means that any portion of the house that you have already paid is being put once again into a mortgage. Lenders have strict rules when it comes to mortgages and only allow mortgages to the person applying for a mortgage if that person can provide proof that he or she can pay off the debt.
There are also other types of mortgages. Joint mortgages with a sole owner, a second home mortgage, mortgage for the members of the armed forces, holiday home mortgages, and expat mortgages are just some of the other mortgages available.
With all these types of mortgages, it’s reassuring that you can mortgage your property should you need extra cash. But if you’re unsure how it all works, you might consider hiring a specialist mortgage broker. The broker will deal with all the necessary paperwork and can assist you should you choose to apply for another mortgage as well as do things like reminding you when to pay for your mortgage.
Mortgages are a perfect way to get money to start a vital project immediately. But what type of mortgage and plan you need to apply for needs to be determined so that you’ll be able to afford to pay for it.