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Mortgages

Changes in the mortgage market over the past few years means that both first-time buyers and others who already have a mortgage may find the choices confusing. The fact is that no one scheme suits everyone and the final choice depends on your personal circumstances. Our job is to advise you on the pros and cons of the various types of mortgage, to help you choose the most suitable scheme and avoid the many potential pitfalls.

There are 3 different main types of mortgage available.
1) Repayment Mortgage.
2) Interest only Mortgage
3) Flexible Mortgage

1) Repayment Mortgage:
This is the original type of mortgage that most home owners who have had their mortgage for some time are familiar with. With this type of mortgage, both interest and capital is paid off over a fixed period. As the capital is repaid, the effect of any interest rate increase is reduced. This is particulaly noticeable during the later years of the mortgage term.

2) Interest Only Mortgage:
You pay only the interest each month over an agreed term. The capital (amount you borrow) is repaid at the end of the term usually through some form of investment such as an Endowment Policy, PEP or ISA scheme. Some lenders do NOT insist on this and expect the mortgage to be repaid either through profit from the sale of your house or refinancing at the end of the term.

3) Flexible Mortgage:
A fairly recent addition to the mortgage world which allows the borrower some flexibility in that you can overpay or underpay or even take a payment holiday without incurring penalties. A major advantage is that overpaying will lead to the mortgage being paid off earlier, maybe saving thousands of pounds in interest.

Flexible Mortgages can be based on either Repayment or Interest only types.

All these can be discussed with our Mortgage Advisers who will point out the full advantages and disadvantages as well as offering a number of choices within each type of scheme.

Warning - Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. The overall cost for comparison is 4.9% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. Using a mortgage to consolidate debts will increase the amount of credit secured against the home and that paying back previously short term debts over a longer period will mean that a greater total amount of interest will be repaid over the term.

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Mortgage Choices are Licensed by The Office of Fair Trading
Consumer Credit Licence No. 587301