VeryVeritas

Can anyone tell me how UK mortgages are cast? What is a typical current lending rate and period? What do they expect in terms of percentage of down payment? Are the loans amortized over fixed periods of time? Does one have to pay any special bank fees or assessments to secure a loan?

What scenario might be the closest to a conventional US mortgage--20% down payment, 0-2 points (prepaid interest), X fixed interest, amortized over 30 years--if any. There are other products here, like variable interest rates, shorter terms, or interest only, but am interested in fixing interest rate if possible for the life of the loan as a hedge against inflation...and perhaps that is not possible.

HKG3

You may want to ask the people in HSBC's international banking center in the USA. They can even transfer your US credit history to the UK.

https://www.us.hsbc.com/1/2/home/per...g/open-account

https://www.us.hsbc.com/1/2/home/per...credit-history

spouse of scouse

I'd just contact a few mortgage brokers in the UK, tell them what you're looking for, and see what they come up with. Much better than just contacting one provider.

VeryVeritas

I am trying to get a picture of how mortgage loans work in the UK in general. I know we will be somewhat constrained due to lack of credit history and HSBC can help, but am trying to suss out what is the norm there.

VeryVeritas

I found an article in Wikipedia that explained the differences and a Money.co.uk or similar site gave me an idea of the range of rates. It's a whole world of difference it turns out. Generally LTV is much higher, long term fixed interest or even variable rates aren't done, and there are stiff pre-payment penalties. Shopping one's mortgage every few years seems the norm. I am not even clear that the property secures the loan, actually, because I read a comment by one person who decried the fact that she had a pre-payment penalty of 3% of the original loan amount but noted she could port this same loan to another house in the UK? Interestingly, despite all the regulations and protections in the US it appears that the default rate in the UK is much lower. Maybe it's the specter of debtors prison... And HSBC appears to have super competitive rates.

Giantaxe

Many US states are "non recourse", meaning that if you default all the lender can do is take the house back regardless of whether it covers the outstanding mortgage. I don't think that's the case in the UK, meaning that "walking away" from a property can be more problematic for the borrower.

MidAtlantic

Use this to get a general background, which I believe is what you are wanting.

Mortgage Types: are fixed rate mortgages best? - Money Saving Expert

VeryVeritas

I have bought and sold a lot of houses over the years and have used just about every loan program out there. I just wanted to know, roughly, what the programs there were like and I have a pretty good idea now.

Under ordinary circumstances I think I would just rent something until our daughter's career and location settles out, but I would like a hedge against inflation which a rental does not really provide, and I also feel like we have a window of opportunity right now with the pound being weaker against the dollar.

Pulaski

Usual terms are minimum 10% down, 25 year amortization, not usually fixed for more than the first five years, at most.

Until recently it was very difficult, if not impossible, to obtain a mortgage that amortized beyond the date you would retire.

VeryVeritas

Wow. So even if a person has an income stream, if they are a little frayed at the edges they (generally) cannot get a mortgage?

Pulaski

Well it's been changing, but literally only in the last 12 months or so. .... I think you can now get a mortgage that amortized until around your 75th birthday, not from all lenders, but I think there is now a choice of at least a few lenders.

holly_1948

Just to be clear on that, for the most part Stateside the lender has a choice - they can pursue you for the full debt in court or they can foreclose on the house. What they (mostly) can't do is both.

Giantaxe

Not in a non-recourse state. There the option almost always is merely to take the house back. Some (most?) recourse states are as you describe.

I see there are less non-recourse states than I though; the majority are recourse.