Residential Mortgages in layman's language means to pledge the residential properties i.e. Apartments, house, flat etc. to get /receive a loan.

It is generally needed to buy a home. In it the lender which is usually a bank or a financial institution lends money to the borrower. The borrower in turn pays a certain additional amount as interest in addition to the principal amount (actual amount borrowed). One can easily receive loans by mortgaging the property if he has good credit history, annual income records showing ample amount of credit. They usually charge 5-15% of down payment in advance. They charge fixed or variable (floating) rate of interest throughout the amortization period of mortgage loan. Usually the fixed one are beneficial for the borrower as he do not have to suffer from market fluctuation in future and has to pay same rate of interest in the starting as well as end of the term.

Amortization period for residential property is usually 20-30 years depending upon the amount borrowed i.e. loan size and borrower’s convenience. 
The borrower should consult a broker prior to the deal with any lender to ensure he is on right path.  The broker acts as an intermediate between lender and the borrower and can negotiate when required on the borrower’s behalf. He can guide about the correct type of mortgage loan one should receive for his property. If not broker, one can also shop around for well suited deal on internet. He should get quotes from minimum of three financial institutions or banks and after comparing select the one which is the most profitable one.

Residential mortgages can be received for various reasons. Few of them are mentioned here to give you an idea where residential mortgages are helpful and required. These are -

• For purchase of home for shelter
• Buying home for to-let purposes
• Buying an old unfurnished home, repairing it, renovating it and selling it later with more profit
• For investment purposes I.e. simply buying a home and selling it later with more profit and minimum effort (known as flipping of property in real estate business).

The reason can be any but the criteria for receiving the loan is same. The borrower has to produce various documents for applying for the mortgaging of his house to the lender. Few of them are his credit history report showing sufficient amount credits, annual income reports showing his annual income. The lender wants to make it sure that the borrower will be able to repay the loan and is not a bankrupt or the one with financial troubles. Borrower should check his credit report before producing it to the bank or financial institution for any type of error that decreases his credentials and hence his worth for receiving total loan amount or size. He should be equipped with his documents before applying for mortgage as when they call him he should immediately produce his documentation in front of them for fast cash in flow.

Few point one should keep in mind while buying property for self use or investment purpose is that it should have clean and green environment, school, college and hospitals near by, green parks, easy public transport availability. All these factors increase the value of the property in  real estate business and especially when the house is being used for re-sale purposes.

The lenders usually do not prefer to give loans to one who are receiving mortgages for the investment purpose of their property as they believe that when one has financial ups and downs, person try to save the house in which he is living and will prefer to pay the installments of that house rather than the one used for investment purpose.

You being a customer should research well for lender’s history. He should inquire well about the lender’s professionalism, time since he is in this business, his fair dealings with his customers. The lender should have minimum of five year experience of the real estate mortgaging as then he would be well acquainted with the market fluctuations and have made his policies accordingly so that he does not overburden his client.
One should wisely take decision of receiving residential mortgage after all it is one of the biggest investments one could ever do in his life.  He should thoroughly look his financial assets and if he feels that he can afford the monthly or yearly installment then only he should go ahead or otherwise wait for some time till his assets replenish.