Types Of Mortgages What Is A Mortgage?
A mortgage is a loan taken out to buy a property or land, most mortgages run for 25 years, however, the term can be longer or shorter. The loan is secured through the value of the property or land until it is paid off; not keeping up with regular payments may lead to the lender
repossessing the property or land.
When Should You Start Arranging For A Mortgage?
The process of applying for a mortgage should start before the search for a property, here are the reasons why:
Ensuring how much you can afford Before investing in anything, seeing how much you can afford is crucial. If you are looking into applying for a mortgage, you must understand your financial position thoroughly.
If you invest in a property which you later cannot afford, you will risk losing it.
Beat rival buyers Arranging a mortgage before searching for a property gives you an advantage compared to rival buyers who have not begun the mortgage process. The further down in the mortgage process you are the more appealing you will be to the property seller.
Buying a property jointly If you are looking at buying a property jointly with anyone, this will affect the sort of mortgage you can get and how much you are able to borrow. To increase your chances of getting the property and mortgage you desire, you must sort this aspect out first.
What Types Of Mortgages Are There?
There are many types of mortgages and ensuring you find the right one for you is crucial. There are many advantages and disadvantages of the different mortgage types and finding the right one for you can be difficult as well as daunting. Some mortgages may not be suitable under any circumstances regarding the position you are in, others may have a balance between pros and cons. You must always seek professional advice and guidance when choosing and applying for a mortgage.
Here are the types of mortgages:
Standard variable rate mortgage Standard variable rate mortgages have an interest rate which can vary and is required to be paid each month. Fixed rate mortgage A fixed rate mortgage is a mortgage which has an interest rate which remains fixed throughout a previously agreed term. Tracker mortgage The interest rate on a tracker mortgage stays directly proportional to another base interest rate, plus a few percentage points. Discount mortgage Discount mortgages are usually most beneficial to first time buyers; they are similar to a standard variable rate mortgage. A significant difference between the two is that the discount mortgage simply gives discount on the rate that has to be paid back. Offset mortgage An offset mortgage is a good way to save on the amount of interest you pay on a mortgage over its term, these mortgages are a good choice for those with large amounts of savings.
Get In Touch
Total Finance UK Ltd, we have a team of professional and knowledgeable advisers who are able to advise and guide you on all aspects of mortgages. Contact us today on Alternatively, you can get in touch with us via 020 8695 7548. email. A member of our team will respond to your enquiry as soon as possible.