Mortgages
Providing quality mortgage advice for Alresford, Winchester and surrounding villages.
Taking out a mortgage is a big step, if it’s your first time buying or you’re a home mover. It’s the biggest loan you will ever have so take advice to ensure you get the best deal to suit you.
We take the time to explain the overly complex wording in terms you will understand, so you know exactly what is going on.
There are a number of different types of mortgages available on the market. Each mortgage carries different pro’s and con’s so it’s important to obtain the best mortgage that suits your particular circumstances.
Types of Mortgage
Taking out a mortgage is a big step, if it’s your first time buying or you’re a home mover. It’s the biggest loan you will ever have so take advice to ensure you get the best deal to suit you. We take the time to explain the overly complex wording in terms you will understand, so you know exactly what is going on.
Interest Only
- Your monthly costs will be low with this option as you will not be paying back any of the money you owe. You will just be paying interest. Your debt will not reduce and you will still owe the amount you originally borrowed at the end of the mortgage term.
- The rate of interest you pay will differ to a repayment mortgage but the amount you pay will be much less as the debt is not reducing (there is no savings element to what you pay)
- Interest only mortgages are only advisable in very specific circumstances and the lenders have very strict criteria, for example only allowing it at low loan to values, on buy to let properties or for clients with income in excess of £100,000pa.
Retirement Interest Only
This is a new type of mortgage designed to help people coming to the end of their interest only mortgage but who do not have the means to repay the mortgage and do not want to move. They are different from equity release mortgages as the amount that can be borrowed is directly affected by the client’s income and credit score. This type of mortgage is designed as a short term fix until the debt can be paid another way or the property is sold and the equity used to clear the outstanding balance.
The Financial Conduct authority gave permission for Retirement Interest Only Mortgages in reaction to the number of standard interest only mortgage customers coming to the end of their agreed terms.
Flexible Mortgage
- These mortgages allow for over payments, under payments, payment holidays. They used to be quite niche but these days most mortgage contracts offer a fair degree of flexibility including 10% overpayment without penalty.
Offset Mortgage
These allow you to link a bank account to your mortgage debt. They work by offsetting the credit you have in the bank against the debt of your mortgage so you only pay interest on the balance left. Typically, these off set mortgages have a higher interest rate, so you will pay the facility and the numbers need to worked out to see if it is advisable.
