Mortgage
b.Types of mortgages
c.Free advice and quote
Choosing a mortgage:
We at the finance warehouse understand that mortgage is one of the most important financial commitments you will ever make. There are many different types of mortgages available in the market today and there are different types of repayment methods. But which is the right mortgage for you? By being better informed about what is available is the key in selecting the right mortgage. We at the finance warehouse understand this and as we are independent would be able to help you in choosing the best for you.
Important things to be considered when choosing a mortgage
- Types of mortgages available
- Repayment methods
- Special requirements
There are thousands of mortgages available in the market and choosing the right one could turn out to be a headache. The finance warehouse being independent, we have access to all the lenders in the market, including many exclusive deals which cannot be obtained directly from the lender. The more common type of mortgages is described below to enable you to make a decision as to which mortgage would suit you best
- Variable Rate
- Fixed Rate
- Stepped Rate
- Discounted Rate
- Base Rate Tracker Mortgages
- Capped Rate
- offset mortgages
Variable rate mortgages can be the lender’s Standard Variable rate or some other variable rate according to the lender depending on that particular product. This can be recalculated on an annual, monthly or daily basis. This means that if there is any change in the interest rate it is not going to be reflected on your monthly repayments until the lenders recalculation date. A variable rate mortgage allows you to take advantage of any falls in the interest’s rates but any savings made should be balance against the risk of any future interest rates rise.
Fixed Rate:
Fixed rate mortgages means that the rate of interest is fixed for a period of time. This kind of mortgage gives a security to know exactly what the repayments are every month. The disadvantage is that if the interest rate goes down still your rate is fixed and there will also be a penalty if you take your mortgage to anywhere else during this period.
Stepped Rate :
There are various forms of Stepped Rate mortgages. They can be a short term fixed rates followed by a discounted period or discounted for a number of years, with the discount rate reducing during the scheme period. Some schemes even offer a cash-back to help with moving costs. Many schemes are only available on an exclusive basis, and if you are interested in this type of a deal please do contact us for the 'Best Buys'.
Discounted Rate :
These are normally offered to first time buyers or to people with high levels of equity. The larger the deposit the greater will be the discount given. The client is given a discount form the standard variable rate of the lender for a period of time.
Base Rate Tracker Mortgages:
The interest rate is variable set at a premium (above) the Bank of England Base Rate, currently 5.75% for a period or even the term of the mortgage. With the fluctuation of the bank base rate the interest also fluctuates. The biggest advantage for this type of mortgage is that usually there will be no or little redemption penalty. This enables to save the interest on the mortgage without penalty by overpayments.
Capped Rate:
The maximum rate of interest is fixed for a certain period of time. The advantage here is that even if the interest rate rises above the set capped rate, your repayments will remain at the capped level and if they drop below the capped rate, your repayments will also fall in line with the lower interest rate. This type of interest rate gives a level of security should the base rate rise but also takes advantage of lower interest rates should they fall. The disadvantage is that there will be penalties if the mortgage is changed during the capped period. After the deal term the interest rates will normally revert to the lender's standard variable rate.
Offset Mortgages:
The interest rate of your mortgage can be reduced by the funds available in your current account and savings account. The advantage is that with the base rate low the interest you get for your savings account is very low, so rather
than getting a small interest rate for your savings account, your savings could work out to cut down your
mortgage payments and help to pay of the mortgages faster. The draw back is you would not be receiving any
interests for your savings account.
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