Mortgages
With over 4,000 mortgages available from more than 100 lenders, how do you choose the right one to suit your circumstances? From traditional mortgages, offset mortgages, current account mortgages……where do you start?
A completely independent service
As independent mortgage advisers, you can be assured that our recommendation is the most appropriate solution to your needs. Using our sourcing systems which are updated daily, you know that the rates quoted by us are the most up to date. Due to our expertise and position in the marketplace, we have been able to negotiate preferential mortgage deals with some top lenders which means it is possible for you to secure a mortgage with rates more beneficial than approaching these lenders directly. In addition to this, we have also negotiated preferential packages from some solicitors and surveyors to enable the costs involved with house purchase to be kept to a minimum.
What type of interest rate?
Fixed Rate A fixed rate is where there is a set interest rate for an initial period of time (typically 2, 3 or 5 years) and then at the end of this term, the normal variable rate becomes payable. A booking fee is often payable to the lender when taking this type of mortgage. With fixed rates, there is often an early repayment charge during the fixed period. In some instances, this period may extend beyond the fixed rate period, however, these can easily be avoided.
A fixed rate would normally be chosen if you were concerned that interest rates may rise in general and to allow you to budget in the early days of your mortgage.
Discounted Rate A discounted rate is very convenient if money is tight at the beginning of the mortgage but is likely to improve in the near future. As the name suggests, the rate for the initial period (again, typically 2, 3 or 5 years) is discounted below the lenders usual variable rate and then reverts after this period to the variable rate.
Caution should be taken when dealing with this type of mortgage as although the initial rate may appear low, if interest rates increase over a period of time, your rate will also increase and there is no ceiling as to how high it may go. Occasionally, there may be an arrangement fee with this option.
There is usually an early repayment charge with a discounted rate mortgage, some of which run beyond the discounted period, but again, this can be easily avoided.
Capped Rate
Capped rates vary in line with general interest rates but do not rise above a certain rate. This is known as the cap. This agreement lasts for a certain period of time after which the normal variable rate becomes payable.
Capped rates, like fixed rates, enable you to plan your budget for the initial period. An arrangement fee is usually payable and early repayment charges also apply.
Due to the appeal of this type of rate, there are very few now available.
Variable Rate
The variable rate is the standard rate charged by lenders and is what you will revert to after the initial period on all of the above rates. The interest rates are constantly rising and falling and depend on the general economy.
Cash Back Deal
Some standard variable rate mortgages offer a cash sum when the mortgage is taken out which can be used in any way. There is sometimes an arrangement fee payable and normally an early repayment charge during the early years of the mortgage when, if you repay the mortgage, the cashback sum must also be repaid.
Offset facility
Many people are now opting for an offset facility on their mortgage which is available with most of the above options. This facility allows you to link your savings to your mortgage thereby reducing your mortgage balance resulting in less interest payable and the prospect of earlier repayment of your mortgage.
Remortgaging
In recent years, remortgaging has become much more popular allowing borrowers to take advantage of competitive interest rates offered by lenders. There are now a large number of competitive remortgage products available.
Many of these lenders and products offer a free legal service and even a free valuation on your property meaning you can transfer mortgage with little or no cost.
By carrying out this procedure on a regular basis, you will greatly reduce the overall amount of interest payable on your mortgage.
Saving money is not the only reason to consider a remortgage. It may be that your circumstances have changed and that a different type of mortgage is now more suitable.
Buy to Let
Becoming a private landlord should not be seen as an easy way to make money. It can be time consuming and risky, however, owning a second property can produce considerable financial rewards through time.
In general, Buy to Let mortgages will offer a lower loan amount than residential mortgages, with the maximum loan being typically 80% of the valuation.
As a guide, you should also aim to achieve approximately 130% of the monthly mortgage payment in rental income.
There are also a number of tax issues which need to be considered in this situation. Not all Buy to Let mortgages are regulated by the Financial Services Authority.
What Next?
Our specialist mortgage advisers will take the time to find out about you, your present circumstances and your future plans before discussing with you the different rates available and making a recommendation based on this information.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE .