Mortgage Guide
Forms of mortgages
available in the UK
Standard Mortgage - For most
property buyers in the UK a standard mortgage is taken. This
is for all purchasers that fit into the standard required
financial criteria required by most lenders.
Bad credit mortgage - if you
have adverse credit there are lenders that will help and we
have access to these online today.
Buy to let mortgage -
looking to rent out the property you are buying then you
need a specialist mortgage. we can do this for you.
Flexible mortgage - this
allows you to be more flexible with your mortgage, you can
overpay and underpay to fit in with your lifestyle. A lot of
lenders will have a higher interest rate for this type of
mortgage.
Let to buy mortgage - A
mortgage if you want to buy another house and rent the one
you are in, so that you can keep your existing property and
rent it out, while purchasing another place to rent.
Which Interest Rate
Option Should I choose?
There are thousands of different mortgage
products on the market, but there are only a few different
options to choose in deciding how interest is charged to
your loan.
Variable
The basic mortgage rate which most lenders
offer is a standard variable rate SVR. This generally moves
up or down according to the Bank of England Base Rate
changes. However, banks and building societies do not always
pass on these changes to their customers, or delay doing so,
which can make it worthwhile shopping around. Special rates
refer to the SVR at the end of the deal period.
Fixed
This type of mortgage sets the interest rate
you will pay for a given period of time – thereby
guaranteeing that the amount you pay back each month will
not change for that period. When the period expires, you
will revert to the lender’s SVR. The obvious advantages of
fixed rate mortgages are that if you are having to budget
carefully over the first few years of your mortgage then you
know how much you will be paying each month and you won’t be
caught out by any surprise increases in the interest rate.
Likewise, if interest rates rise above the
fixed rate you are paying then you have the satisfaction of
knowing you are saving money. The reverse is also true. If
interest rates drop below the fixed rate you will lose out,
but you will still be sure of how mush has to come out of
your bank account each month.
Fixed rate mortgages usually last between
one and five years, the best rates occurring in the one to
three year time frame. Some lenders offer fixed rate
mortgages lasting 10 years or more – in some cases, the full
length of the mortgage term.
How long a fixed rate you opt for will
depend on your view of how interest rates are going to move
over the next few years, as well as the comfort you may get
from knowing that whatever changes do occur, your payments
each month will not change for that period. Fixed rates have
proven very popular with people looking to protect
themselves against interest rate movements, particularly as
variable rates have been as high as 19 percent in the past.
However, recent years have seen interest rates fall and many
borrowers have been turning to base rate tracker mortgages
instead, to ensure they benefit from those rate decreases as
they occur. Also, be aware there can e catches, such as
extended tie-ins.
Overview
of mortgages |
