Mortgages
A mortgage is a loan you take out in order to buy property.
There are few ‘ethical’ concerns when borrowing the money, although many people prefer to borrow from a building society rather than a bank because they are mutually owned.
Repayment Methods
The two main ways to repay your mortgage are 'repayment' and 'interest only'. With a repayment mortgage you make monthly repayments for an agreed period (the 'term') until you've paid back the loan and the interest.
With an interest only mortgage you make monthly repayments for an agreed period, but these will only cover the interest on your loan. You will normally also have to pay into another savings or investment plan that will hopefully pay off the loan at the end of the term.
This is where it is important to consider how your invested money is going to be used – is it going to go to companies of which you disapprove?
If you would like more information on this, the Government’s website is here:
http://www.moneymadeclear.org.uk/products/mortgages/types_of_mortgage.html
Flexible Features
Some mortgages offer you options to vary your monthly payments, or to combine your mortgage account with savings and other income - these are called flexible, current accounts and 'offset' mortgages. It’s best to talk to us about these, but if you would like to read about them first, click here:
Interest Rates
You'll also find a range of interest rates to choose from; for example:
Tracker' rates that change in line with Bank of England rates.
'Fixed' rates are fixed for a set number of years, and 'capped' rates have a variable interest rate with a ceiling so that your payments won't go above a set amount.
With hundreds of mortgages on offer – and frankly with the hassle you’ll have even when you have decided which one is right - they rarely go smoothly. Let us help you through the maze that is mortgages.
