what is a first mortgage?

etilico

What is a first mortgage and how is it different from a "normal" mortgage?

Thrugelmir

etilico wrote: »

What is a first mortgage and how is it different from a "normal" mortgage?

Where are you getting the term first mortgage from?

_Andy_

I think the OP may mean a first time buyer mortgage?

In which case it's as the name indicates.

opinions4u

etilico wrote: »

What is a first mortgage and how is it different from a "normal" mortgage?

I will assume you mean a first time buyer mortgage.

A mortgage is a loan which is secured against property, typically a house. Default on the loan and the lender could, potentially, repossess that property.

Lenders will often target their offers to different segments of the market.

First time buyer - people buying their first home.
Home movers - people moving home.
Remortgages - people staying in the same home but changing lenders, usually to save money or raise more money!
Buy-to-let - where people are buying a property with the intention of putting tenants in to it.

You might find, for example, that lenders charge a first time buyer a higher interest rate (as they are a higher risk customer) but have up-front cost reductions such as free valuation fees and a contribution towards legal bills. The lower up-front costs may appeal to a couple who have saved hard for deposit and have very little left.

A home-mover may prefer a lower rate and be prepared to pay a bigger product fee to get that, often out of the large amounts of equity they have built up in their property over the last decade.

In the end, the key is to seek out the best overall package for an individual borrower's circumstances. The best way to do this is usually via a reputable whole of market mortgage adviser.

EDIT: It's more than possible that Vigilant22 has hit the nail on the head with a different interpretation of what the OP means.

Basically first mortgage, second mortgage / first charge, second charge etc is telling you the order in which the lender gets their money back in the case of repossession.

For example, if you have a house with a £100k mortgage with Halifax and a £25k secured loan with Ocean Finance, and your house is repossessed and sold for £110k, Halifax will get all their money back but Ocean would only get £15k back.

VIGILANT22

2nd mortage, 2nd charge...ie First Plus
aka ....carol vorderman
secured loan
advice.....not regulated..........:eek:
don't do it............