Mortgages

The Basics

Mortgages are the largest single transaction in most people’s lives. Buying a property can be a stressful and time consuming experience, although nowadays the financing of a mortgage is a case of finding and selecting the most suitable deal. Hundreds of banks, building societies, and smaller niche lendersoffering a variety of interest rate deals, associated fees and enhancements are available across the market place. It is our job to find a mortgage that is tailored to your individual needs.

Associated Costs - Read the small print

Be cautious, the devil is always in the detail. A headline rate will not necessarily reflect the true cost to you. The last thing you need when signing up to the largest financial commitment you’re likely to make, is a costly surprise further down the line. Once we’ve sourced the most suitable mortgage for you, we can help with all the application paperwork and will give you a clear breakdown of costs.

Please feel free to contact us for a free, no obligation, initial consultation.

Methods of Repayment

There remains two main methods of repaying a mortgage loan, and it is possible to set up the loan on a ‘part repayment and part interest only’ basis. A description of these methods is provided below.

Repayment (capital and interest mortgages)

Under a repayment mortgage your monthly repayments consist of both interest and capital hence, over time, the amount of money you actually owe will decrease. In the early years your repayments will be mainly interest and therefore the capital outstanding will reduce slowly in the early years.

Whilst this method ensures that the loan is repaid at the end of the term providing all payments are made on time and in full, it is generally more expensive at the start.

Interest only mortgages

As their name suggests, with an interest only mortgage you only repay the interest on the loan. At the end of the term the capital is still outstanding. Therefore you will usually need to take out some kind of investment policy to save up enough to repay the loan at the end of the term.

Traditionally the preferred product for repaying the capital of an interest only mortgage was a mortgage endowment policy (which included a set amount of life cover) – although more recently customers are using Individual Savings Accounts (ISAs) and pensions to build up a sufficient sum and taking advantage of the tax breaks offered by these products.

The Financial Services Authority does not regulate some forms of mortgages. If this is the case, we will make you aware of this when recommending a product.

If you do not keep up repayments on your Mortgage, or another loan secured on your home, your home may be repossessed.