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It seems that every day there is a new type of mortgage out there. Quite frankly it can be bewildering trying to work out what the difference is between all the different mortgage types and, more importantly, which of them is right for your own particular circumstances and needs.
That's where Northcliffe Mortgages can help. As fully qualified, totally independent mortgage advisors Northcliffe Mortgages can guide you through the mortgage maze, ensuring that the type of mortgage that you choose is suited to you and your needs.
The list below gives brief details of some of the different mortgage types available and Northcliffe Mortgages can help explain the advantages and disadvantages of each to ensure you get the right type of mortgage for your particular needs and requirements.
Please note that Northcliffe Mortgages offer whole of market mortgage advice and the protection products offered is from a range on insurers based on fair and personal analysis of the market for Life Assurance, Critical Illness Cover, and Income Protection Insurance.
This is the most common type of mortgae. Your monthly repayments are calculated so that they include the interest payable and a proportion of the actual mortgage loan. Over the agreed term of the mortgage, say 25 years, your repayments should cover all the interest payable and have reduced the mortgage debt to zero thus repaying your mortgage loan in full.
Unlike a repayment mortgage your monthly repayments only cover the interest portion of your loan and no repayment of the mortgage dept itself. Thus at the end of the agreed mortgage term your mortgage debt will have remained the same and has to be repaid from other agreed sources of savings or investments ie pensions maturing investments. Lenders require evidence that a customer will have in place a clear credible repayment strategy and that the repayment strategy has the potential to repay the capital borrowed. Repayment strategies may include deposits or investment product(s), pension(s), periodic repayment of capital from irregular sources in income (i.e. bonuses), the sale of another property or other land or other acceptable methods which meet lending criteria. This means the mortgage payments each month will be lower than those of a repayment mortgage for a similar loan and term. Where the repayment of capital is an investment the investment runs alongside the mortgage but is separate from it; the costs should be taken into account when calculating the overall costs of the mortgage arrangement.
A MORTGAGE IS A LOAN SECURED AGAINST YOU HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
The interest rate on a tracker mortgage is usually linked to the Bank of England base rate e.g. 1% above base rate. So if the base rate changes, your mortgage rate will change either up or down according to the movement of the base rate.
The interest rate remains the same throughout the period of the mortgage deal– typically one to five years, though it is possible to get ten year fixed rates. With a fixed rate mortgage there is no fluctuation in the monthly amount you pay whilst the mortgage deal is in place irrespective of what happens to mortgage of interest rates in general