What Can You Use Equity Release For?
8th December 2022What is a Mortgage in Principle?
25th January 2023What Can You Use Equity Release For?
8th December 2022What is a Mortgage in Principle?
25th January 2023WHAT ARE THE OPTIONS AVAILABLE?
What Is A Mortgage?
Simply put, a mortgage is a financial agreement between you and a lender that allows you to lend a large amount of money to purchase a property. The loan is secured on the property and if you do not make the mortgage payments, the Lender could repossess the property and sell the property to get their money back.
Repayment Or Interest-only Mortgage
A repayment mortgage is as straightforward as it sounds; it is simply a mortgage that you must make repayments on; this is where you pay back the loan on the house each month as a regular payment. In contrast to this type of mortgage, you have an interest-only mortgage, this is where every month, you just pay off the interest on the loan. At the end of the mortgage term you will need a suitable repayment vehicle to pay back the original loan. This could be downsizing, sale of another property, or pension investments etc.
Should You Choose A Fixed-Rate Mortgage?
With a fixed-rate mortgage, you choose the option with the same rate for a fixed amount of time; after the number of years has passed, the mortgage reverts to a standard variable rate. Across the UK, more than 60% of homeowners choose to go with a fixed-rate mortgage; they are a popular option because you know what your repayment fee will be every month, and it does not change, offering security.
The downside to a fixed-rate mortgage is that if interest changes, you could end up paying more than you would if the mortgage was variable/tracker so should the rates fall, you won’t see any benefit, but most homeowners feel this is outweighed by the positive that you are aware of the financial outgoings every month with a fixed-rate mortgage.
What Is A Tracker Mortgage?
This mortgage option is a little more complicated than the previous option. It moves up and down in correspondence with the Bank of England’s base rate.
A tracker mortgage can be applied for the entirety of your mortgage term, or it can be used as an introductory period, generally two or five years, after which your mortgage will revert to a standard variable rate.
Sometimes this type of mortgage can be the best option as it is easy to understand. Simply put, if the base rate rises, so does your mortgage payment. It is essential to keep this in mind and only use reputable lenders if choosing this mortgage type.
The base rate can change rapidly as it is unpredictable.
First-Time Buyer Mortgage Options
If you are a first-time buyer, most mortgage providers will have unique solutions tailored specifically to you and your needs; they are focused on helping people get onto the property ladder. Generally, these mortgages suit new homeowners with a small mortgage deposit.
More often than not, first-time mortgages are a great way to get onto the property ladder. Still, you should always look into all of the mortgage options available to you and find out what suits your circumstances best.
Speak To A Mortgage Adviser Today To Find Out More
When it comes to mortgages, there are many options to choose from; we have only touched on a few in our article; there genuinely are so many to choose from we could not name them all. It can be overwhelming to figure out which is right for you.
That’s where The Mortgage Hive comes in. We are experts in the mortgage industry and will work with you to find the best mortgage option for your needs.
Finding the right mortgage for you might seem impossible, but we promise our advisers are experts in the field and can find the right one for you and your family.
Contact us today, and let us help you get started on homeownership. Our advisers are always happy to answer any questions or queries on the different mortgages; all you have to do is call us.