To buy a property, a mortgage is usually acquired from a lender. Mortgages are essentially long term loans secured against a property and repaid over a fixed period known as a mortgage term.
Mortgage Solutions can arrange mortgages for people wishing to:
- Purchase a property
- Purchase their council property under the Right to Buy scheme
- Remortgage their home or a rental property they own
- Buy to Let
- Let to Buy
There are two types of mortgage repayment methods which you should be aware of:
Repayment
With a repayment mortgage, payments are calculated so that by the end of the agreed loan term, the whole of the loan has been repaid Part of each monthly payment covers the amount of interest for that month and the remaining part pays off some of the capital (the amount borrowed). This mortgage repayment method is also known as a Capital & Interest mortgage.
Interest Only
With an Interest Only mortgage, the monthly payment only covers the interest charged by the lender. None of the amount borrowed is repaid until the end of the loan term at which time the whole loan must be repaid in full. This means that interest is charged on the full amount of the loan throughout the loan term. It is your responsibility to ensure that a suitable means of repaying the loan is in place from the outset.
Confused by all the jargon? Let us guide you through the minefield...
In recent years the number of different mortgage deals available has increased dramatically, creating many different mortgage options. Mortgage Solutions review the whole marketplace to find the most appropriate package to meet your individual circumstances. The scheme we select for you will be one of the following types:
Variable Rate Mortgages
With a variable rate mortgage, the interest rate applied to the loan generally rises or falls in line with other interest rates in the economy. You should be aware that interest rate changes will result in a higher or lower amount of interest being charged on the mortgage which will affect your monthly payments.
Tracker Mortgages
This is a specific type of variable rate mortgage. Interest on the loan tracks a bank base rate which means that the interest rate is variable. At the time your mortgage is arranged you will be advised what margin is added to the base rate and this margin is usually fixed for the whole term of the mortgage.
Fixed Rate Mortgages
With a fixed rate mortgage, the interest rate which is charged on the loan is fixed for a set period specified by the mortgage lender. The monthly payments will remain the same during this set fixed rate period. Thereafter, the interest rate and monthly payments may vary when the scheme reverts back to the lenders standard variable rate (SVR).
Discounted Mortgages
The interest rate applied to the loan is discounted by a set amount below the lenders standard variable rate (SVR). If the rate changes, the discounted rate will also change but will remain below the SVR by the same margin. The discounted rate normally applies for a set period after which it usually reverts to the mortgage lenders SVR.
Need more information? Please contact us for a free informal discussion about your mortgage options.
The overall cost for comparison is 6.8% APR
This is intended as a guide only - other criteria may apply, and we can advise on any special terms and conditions which your selected lender may wish to impose at the time of application.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
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