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Which type of mortgage?
There are more than 2000 mortgage products available
how do you
know which one to choose?
Lenders will offer a huge variety of mortgage deals and
discounts
to tempt you to choose one of their home loans and there is
nothing to stop you taking advantage of a deal however make
sure it fits with your circumstances and weigh up the pros
and cons of each mortgage offer first.
Fixed rate mortgage
For - you guarantee the level of your monthly payments
for a
period of time.
Against - if interest rates fall you could end up paying too much!
Capped rate mortgage
Like fixed rates the maximum rate of interest is fixed
however below that the rate can fluctuate up and down
with prevailing rates so on the face of it you get the
best of both worlds - however most capped rates are set to
low for interest rates to fall beneath them but set to
high to compete with fixed rate deals on offer,however
unlikely to suffer any sleepless nights with this one.
Discounted rate mortgage
Great if interest rates are falling however if rates
are
on the increase you have no ceiling on monthly
repayments - needs a bit of thought this one
base rate tracker mortgage
These are a variation on the discounted schemes, the
rare
you pay is a set margin above specified base rate ie
Bank of England.
Cashback mortgages
Cashback mortgages used to be all the rage but their
popularity has waned due to the fact that you are inevitably
tied into the lenders variable rate for a considerable
number of years even though you may have spent the cashback
in the first few weeks! Can still be viable for first time
buyers though.
100% mortgages
If you are unable to come up with a deposit then a 100%
loan
could be the answer,however you will almost certainly have to pay
a MIG fee and your credit file will have to be squeaky clean!
Standard variable rate mortgage
Mortgage rate can rise and fall to reflect changing
market forces, so
no safety net - but on the upside no tie in with lender so usually
a competitive rate and free to switch at any time without
redemption penalties.
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YOUR HOME IS AR RISK IF YOU DO
NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT. ALL
LOANS ARE SUBJECT TO STATUS. SECURED LOANS ARE SECURED ON PROPERTY
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