What is a sharia mortgage?

These mortgages differ from traditional home loans in that they don’t involve paying interest, as that’s forbidden under sharia law. In order to qualify for a sharia mortgage, you’ll typically need a deposit of at least 20% of the property.

How does a sharia mortgage work?

Sharia-compliant mortgages are really ‘mortgage alternatives’ and function as no interest in home purchase plans. Though there are several variations across the market, all work in the same basic way. The bank buys the property on your behalf and becomes the legal owner. Your monthly payments function more like rent, with a portion going towards buying out the property owner’s stake. At the end of the term, you should either have bought the property back or have an outstanding sum left to settle before you become the legal owner.

Where can you find a sharia mortgage?

You can find sharia mortgages at many UK banks and building societies, not just those who specifically describe themselves as Islamic banks.

I can help you find the right sharia mortgage and assist you through the process as it can be complicated, especially when it comes to remortgage, which can be complex with a sharia-compliant mortgage.

What is a residential mortgage?

Whether you’re a first-time buyer or looking to move house, a residential mortgage is the type of mortgage you will need to take out. A residential mortgage is a mortgage for a house that you live in. It is a long-term loan that helps to fund the purchase of a property.

There are several residential mortgage options and products available in the market. I will help you find the best residential mortgage which is tailored to your needs.

Buying your first home can be extremely exciting but confusing at the same time. I will explain each aspect of the process including working out how much you can borrow, how much it will cost, obtaining an Agreement in Principle, processing the mortgage application, and explaining the various terms that are used by mortgage companies, solicitors, and estate agents.

Before I can start making recommendations on a suitable mortgage, I will need to gather detailed information from you. I will need to understand your financial circumstances to be able to offer you the best possible advice. I will need the information about your income, expenditure, loans or credit cards, and also any regular outgoings such as childcare costs.

After reviewing all your details and documents, I will be able to make a recommendation that best meets your needs.

I will explain your options clearly and when you are ready to progress with your mortgage, I will make the experience as effortless and stress free as possible.

Once your application has been made, I will oversee the process, keeping you fully informed every step of the way.

With this type of mortgage, you are only paying interest each month. This means that although your payments will be lower, the amount you borrow will still be outstanding at the end of the mortgage term. You’ll need to make alternative arrangements to pay off the mortgage to avoid property having to be sold, You’ll need to make alternative arrangements to pay off the mortgage to avoid the property having to be sold.

A secured loan is a loan where the borrower pledges some asset, such as property, as security against the loan.

With a secured loan you can usually borrow from £3000 to £100,000, some lenders will consider lending up to £500,000. The amount borrowed is repaid monthly over a term agreed at outset, which will usually range between 3 and 25 years.

Bridging loans are a short-term funding option most commonly used to help fund a new house purchase while you’re waiting for your existing property to sell. Bridging loans can also be used for a variety of reasons such as major structural home improvements, divorce, inheritance planning, renovation projects or auction properties.

If you are looking to buy a property to rent out to tenants then you’ll need a buy to let mortgage.

How do buy to let mortgages differ from residential mortgages?

• On a residential mortgage, your deposit could be as little as 5% of the property value, however on a buy to let mortgage you will have to pay a much larger one
• Unlike a standard mortgage, where the amount you can borrow is linked to your income, with a buy to let mortgage, although some lenders may have a minimum income requirement, they will instead look at how much rent you could make from the property on which the mortgage is secured.
• Most buy to let mortgages are taken on an interest-only basis to maximise income, which means your monthly payment will only cover the interest on your mortgage. The money you have borrowed for the house itself, will not go down. This amount has to be paid off in full at the end of your term which is done either by selling the property or taking out another mortgage.

What is a Commercial Mortgage?

Commercial mortgages, sometimes referred to as business mortgages are mainly for business owners who are looking to buy property or land for commercial use. A commercial mortgage is a mortgage loan secured by commercial property, such as an office building, industrial warehouse, or apartment complex. The proceeds from a commercial mortgage are typically used to acquire, refinance, or redevelop commercial property.

How does a Commercial mortgage work?

A commercial property mortgage is usually a long-term loan (often up to 25 years) that provides the cash to purchase a business premises. Most commercial mortgages only offer up to 70% of the total value of the property, the lender relies on the business to find the rest in order to complete the purchase.

If you have had credit problems in the past this can have a severe impact on your ability to obtain a mortgage.

What are the usual types of credit problems?

1. County Court Judgements – Someone has taken you to court over non-payment of a debt and obtained a judgement against you.
2. Defaults – If you have failed to keep up your payments on a credit agreement your lender may record the account as defaulted. As a general guide, this may occur when you are 3 months in arrears, and normally by the time you are 6 months in arrears.
3. Mortgage and Secured Loan Arrears – Any payments you have missed will be recorded.
4. Unsecured Credit Arrears – Any payments you have missed will be recorded.
5. Bankruptcy – Is a legal process where a person or business who is unable to repay their outstanding debts to creditors and may seek relief for some or all of their debts. Bankruptcy is imposed by a court order, often initiated by the debtor.

Credit problems such as these are recorded by credit reference agencies and the records can be accessed by potential mortgage lenders.

If you have had credit problems in the past, it would depend on individual circumstances whether or not you will be able to obtain a mortgage. I have access to lenders who could help clients with credit problems.

What is Remortgage?

Remortgaging is the process of switching your mortgage to another lender, or in some cases staying with the same lender whilst switching mortgage deals. If your existing mortgage deal is coming to an end and you’re about to move onto the lender’s standard variable rate which could result in an increase in your monthly mortgage payments. Then by remortgaging before your term ends could potentially save you money by switching to another deal or another lender.

There are also other reasons why you might want to consider a remortgage, perhaps you want to cover the cost of home improvements or simply pay off more expensive debts.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage By consolidating your debts into a mortgage, you may be required to pay more over the entire term than you would with your existing debt.

If you have a mortgage, your lender will insist that your property is protected by buildings insurance. The insurance company usually pays out if your property is destroyed by fire, floods or subsidence. Damages to fixed fittings such as baths and kitchens are often included, as well as garages and sheds.

Your cover is based on what your home would cost to rebuild. I can help you to find the best cover for your building.

Covers the loss of or damage to the contents of your home. This includes your furniture, electrical goods and other items within your home. Different policies offer different levels of cover but generally you’ll be covered against theft and fire and have the option to insure against damage you may cause by accident.

The standard Landlord insurance for buildings and contents usually includes:

• Loss or damaged caused by fire, storm, flood, falling trees, theft, malicious acts or vandalism.
• Loss of rent.
• Legal liability as owner of the buildings for causing injury to others or for damage to their property.
• Home emergency cover for call outs or repairs if you have an emergency.

As a landlord you can have additional cover options such as:

• Buildings accidental damage and malicious damage by tenants to cover you for incidents such as drilling through a pipe, cutting an electrical wire and putting your foot through the ceiling whilst walking in the loft.
• Contents accidental damage and malicious damage by tenants, so you don’t have to worry about things such as spills on carpets or cracks on tiles.
• Legal expenses, rent guarantee and eviction of squatter cover insures you for irrecoverable costs and fees to pursue or defend claims involving breach of tenancy agreement and unpaid rent.

The plan covers you for a fixed period and pays out a one off lump sum if you die during the policy term. With some life insurance policies, you can add additional options, for instance critical illness cover. If you add the critical illness cover, the plan will pay out once on diagnosis of a qualifying critical illness or if you die during the term of the policy.

A critical illness plan is designed to pay out a lump sum on the diagnosis of certain specified illness. It is often added to a life assurance policy as an additional benefit but can be a standalone plan.

The income protection plan is designed to pay out a regular income in the event you are unable to work due to an accident or illness. These types of plans continue to pay out and income as long as you are unable to return to work up until the end date of the policy

None of us can predict when redundancy, an accident or sickness may affect you or your family. With the redundancy cover it can give you that peace of mind.

A short term income protection insurance typically runs for 12 months and has to be renewed every year. It can help you to maintain your standard of living if you can’t work due to an accident or sickness or if you were made redundant.

You could receive up to 65% of your gross monthly income for up to 12 months protecting more than just your mortgage or rent payments and helping you to meet your financial commitments.

This plan can help you provide a regular income for your dependents. Most families rely on at least one regular monthly salary to cover regular household spending. The plans helps you to look after your family’s living costs if something happens to you.