Irrespective of whether you’re investing in your first home or are relocating from your current one, investing in a property is one of life’s most important financial and personal investments and when applying for a mortgage you can easily be confused by all the different options lenders give you.
Essentially a mortgage is a loan you get, from a lender, to buy a new home. Repayment of this loan is paid monthly for the period of the loan, with interest, and if you don’t manage to meet the monthly repayment demands then the lender has got the right to foreclose and sell your property to pay back the monies that you owe.
Therefore deciding on the right mortgage is important. Firstly you should use a mortgage calculator to see how much you can manage to pay. These are easily available online and give you a reliable idea of how much, your monthly repayments will be.
There are a variety of mortgages available and your personal preference of mortgage will depend on what you prefer. Listed below are just a few of the mortgage possibilities available to you.
New borrowers are more than likely to be offered a ‘Fixed Rate’ mortgage as are borrowers who are likely to re-mortgage. Fixed for a term of two, three or 5 years this type of mortgage is popular as the borrower knows exactly how much the monthly repayments will be for a fixed time period. The only downfall with this type of mortgage is that if the interest rates do fall dramatically then they will not be able to take advantage of these as they’re on a fixed rate.
Another well-known alternative is the ‘Tracker Rate’ mortgage. The ‘Tracker Mortgage’ tracks the banks base rate for a fixed time, from 2 to ten years. The interest rate will be set to a fixed percentage above the banks base rate for a given period of time.
A ‘Discounted Rate’ mortgage provides a discount off the lenders standard variable rate mortgage for a fixed time, for example 2 years. The borrower will pay roughly one percent less than the standard lenders rate so will benefit in any interest rate cuts.
These are just a few of the options available to you and it is vital that you understand fully all the conditions to the mortgage. It’s standard with all mortgages that early repayment charges will apply as will part repayment charges. This also applies of you come to a decision to switch lenders or indeed switch to another product by the same lender.
For more information and resources on what mortgage products there are to offer visit our main site today mortgage products and debt collection – Thanks
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