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Virgin Money will open a lending business in the United States today. The company, which is rebranded from CircleLending, organizes and services private loans among friends and family members. Its parent, the Virgin Group, operates large financial businesses in Australia and South Africa.
Like most mortgage lenders, Virgin will first run a quick online affordability check. This checks your income and typical monthly costs to give you an idea of how much you can afford to borrow.
Fixed-rate mortgages
Whether you are looking to buy your first home or are considering refinancing your existing mortgage, choosing the right loan type is an important decision. There are several options available, but the most popular is the fixed-rate mortgage. This type of loan offers a set interest rate for the life of the mortgage, which makes it easy to budget and predict your monthly payments. Fixed-rate mortgages are available in various terms, with 30-year and 15-year loans being the most common offerings.
Conventional fixed-rate mortgages are offered by banks, credit unions and online lenders. These loans offer slightly stricter requirements, such as higher credit scores and debt-to-income ratios. They also have lower maximum loan amounts than other types of mortgages.
Other types of mortgages include adjustable-rate mortgages (ARMs), which have varying rates and payment caps over their lifetimes. ARMs often appeal to first-time homebuyers because they offer lower introductory rates, which can boost buying power. But fixed-rate mortgages may be better for homeowners who plan to stay in their homes for a long time.
Another option is a government-backed fixed-rate mortgage, such as FHA or VA loans. These are reserved for borrowers with less-than-perfect credit or who need help affording a down payment. Finally, jumbo fixed-rate mortgages are available for borrowers who require financing exceeding conforming loan limits.
Tracker rate mortgages
Tracker mortgages track a specific percentage above the Bank of England base rate, and as that base rate rises or falls so too do your repayments. This makes them more flexible than fixed rate mortgages, which typically last for 2, 3, 5 or 10 years before reverting to your lender’s standard variable rate (SVR). You can also get lifetime trackers, which don’t revert to the SVR at the end of their term and can be a good choice for people who may move home in the future.
Some tracker mortgages come with a collar or cap, which is a minimum rate of interest that you won’t pay. urgent cash loans This protects lenders in the case of a very low base rate, for example, by ensuring that your rate will never fall below a certain level. Collars are generally buried away in the small print and may not be clear to first-time buyers.
Some trackers also come with lower early repayment charges than fixed rate deals, or no ERCs at all. This can be an advantage for borrowers who may wish to switch mortgages or remortgage before the end of the introductory period, as they won’t have to pay an ERC. However, it’s important to remember that if the base rate does rise significantly your monthly payments will increase too.
Affordability tool
A mortgage is a big financial commitment and it’s important to be sure that you can afford the amount you’re planning on borrowing. To help you, Virgin Money offers an affordability tool on their website that can give you a rough estimate of how much they’d be willing to lend you. This is based on a variety of factors, including your income and typical monthly expenses.
The affordability tool asks standard questions and uses a soft credit pull to calculate your eligibility without affecting your credit score. It can also predict how the cost of your loan will change if you increase your down payment or interest rates rise.
Virgin Mortgages offer a variety of products, from fixed-rate mortgages to tracker rate mortgages. Their tracker mortgages follow the Bank of England Base Rate, which is an indicator of how much it costs to borrow in the country. This means that you can easily keep track of your repayments and adjust them as needed. They also offer buy-to-let mortgages, which are specifically designed for those looking to invest in property and rent it out.
Fees
Virgin Money offers personal loans for a variety of purposes. Its online application process is simple and fast, and the company typically offers an instant decision. Its personal loans are unsecured, meaning they don’t require any asset as collateral for repayment. It also offers flexible payment terms.
To qualify for a Virgin Money loan, you must have a good credit score (i.e., a high score on Experian’s scale, 531 or higher on Equifax’s scale, and 604 or higher on TransUnion’s scale). In addition to its credit score requirements, Virgin Money requires a stable income and employment history.
Until 2010, Virgin Money US (formerly CircleLending) was an American social lending and loan-servicing business that provided peer-to-peer loans between friends and family. Its business model differed from later crowdfunding and social lending businesses, which encouraged peer-to-peer borrowing between strangers.