{"id":72349,"date":"2020-03-16T13:11:24","date_gmt":"2020-03-16T13:11:24","guid":{"rendered":"https:\/\/www.templewealth.co.uk\/?p=72349"},"modified":"2020-09-23T15:52:36","modified_gmt":"2020-09-23T15:52:36","slug":"finding-the-right-mortgage-for-you","status":"publish","type":"post","link":"https:\/\/www.templewealth.co.uk\/finding-the-right-mortgage-for-you\/","title":{"rendered":"Finding the Right Mortgage for You"},"content":{"rendered":"\n

There are many choices to make when looking for a mortgage.<\/strong><\/p>\n\n\n\n

There are literally thousands of different types of mortgages on the market\nand choosing the right one can be daunting. But before deciding which mortgage\nto go for, you need to decide what type of mortgage to get \u2013 repayment,\ninterest only, fixed, tracker or discounted. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n\n\n\n\n

The one that is right for you depends on your circumstances. Choosing\nthe right type of mortgage is incredibly important and getting the wrong one\ncould cost you thousands of pounds.  Narrowing\ndown the mortgage type that is best suited to your circumstances and finances\nwill help you to choose the right lender and mortgage product.<\/p>\n\n\n\n

Repayment or interest-only mortgage?<\/strong><\/h4>\n\n\n\n

Repayment (or Capital and Interest) mortgages are when you repay the\ninterest and the equity of the house each month. In contrast, an interest-only\nmortgage is when you just pay the interest and then pay-off the equity at the\nend of the term.<\/p>\n\n\n\n

For most people, a repayment mortgage is the most appropriate choice \u2013\nthey guarantee you are paying off your debt and ensure you will have repaid the\nmortgage at the end of its term.<\/p>\n\n\n\n

Interest-only mortgages were popular in the past, because the monthly\ncosts were low and it allowed you to defer paying for the house. However today\nonly a few lenders offer interest only and many have conditions such as minimum\nincomes of \u00a375,000 or a certain amount of equity in the property.<\/p>\n\n\n\n

Should I go for a fixed rate mortgage?<\/strong><\/h4>\n\n\n\n

A fixed rate mortgage is when the rate is fixed for a set number of\nyears, after which it reverts to the lender\u2019s standard variable rate. More than\n90% of homeowners chose a fixed rate mortgage in 2017, according to the\nFinancial Conduct Authority.<\/p>\n\n\n\n

Fixed rate mortgages are a popular option, because you know exactly what\nyour monthly repayments will look like over a set period. You are protected\nfrom increases in interest rates by the Bank of England during your fixed rate\nperiod.<\/p>\n\n\n\n

However \u2013 you may pay more for a fixed rate mortgage than you would with\na variable rate mortgage and you won\u2019t benefit if interest rates fall \u2013 so you\ncould be trapped in a higher rate mortgage. You also limit your ability to re-mortgage,\nas fixed rate mortgages almost always come with early redemption fees.<\/p>\n\n\n\n

If I choose a fixed rate, how long should I fix for?<\/strong><\/h4>\n\n\n\n

If you do decide to go for a fixed rate mortgage to guarantee your\nmortgage costs, you need to decide the term of it \u2013 normally two, three or five\nyears.<\/p>\n\n\n\n

Going with a five-year fixed mortgage will give you greater certainty,\nand can be appealing for people in stable but financially stretched\ncircumstances who want to minimise any financial risks. But a lot can happen to\nyour circumstances in five years, and you would have a penalty for changing the\nmortgage early. <\/p>\n\n\n\n

A two or three year fixed rate is often at a lower interest rate so you\ncould save on your monthly payments however, as it would end earlier, it leaves\nyou open to fluctuations in the market and if interest rates are higher when\nyour rate finishes then whatever you change to could end up costing you more.<\/p>\n\n\n\n

For these reasons, choosing to fix your mortgage and how long for will\ndepend on your circumstances and also what you think will happen in the future\nin regards to pay increases, having children or moving home.<\/p>\n\n\n\n

What is a tracker mortgage?<\/strong><\/h4>\n\n\n\n

A tracker mortgage goes up and down with the Bank of England\u2019s base\nrate. For example, you can have a tracker that is base rate plus 2%, meaning\nthe interest you pay will always be 2% above the Bank of England base rate.<\/p>\n\n\n\n

Tracker rates can be for the entire length of the mortgage, or just for\nan introductory period (between two and five years), after which the rates\nrevert to the lender\u2019s standard variable rate (which is invariably a lot more\nexpensive).<\/p>\n\n\n\n

This type of mortgage can sometimes present the best value option. It\u2019s\nalso the most transparent \u2013 you know that if the base rate increases by 0.25%,\nso will your repayments. On the other hand, if the base rate falls, anyone on a\ntracker mortgage will see their repayments fall too. This is important, because\nlenders have been accused of not passing on discounts to customers on standard\nvariable mortgages when the base rate has fallen in the past.<\/p>\n\n\n\n

However, because the base rate can change, a tracker mortgage is still\nunpredictable. If you\u2019re on a tight budget, you may prefer to choose a fixed\nrate mortgage instead.<\/p>\n\n\n\n

Should I choose a standard variable rate (SVR) mortgage?<\/strong><\/h4>\n\n\n\n

You should hardly ever choose a standard variable rate mortgage. They\nare the worst value mortgages on the market because they give lenders the total\nfreedom to charge however much they want to.<\/p>\n\n\n\n

Most people who are on a standard variable rate mortgage because their\nexisting mortgage deal has run out and they haven\u2019t switched to a better rate.\nLenders rely on the inertia of homeowners to keep them on this type of mortgage\nonce they have ended up on it.<\/p>\n\n\n\n

You should consider re-mortgaging if you\u2019re on a Standard Variable Rate\n\u2013 there\u2019s a high likelihood that you could save yourself some money.<\/p>\n\n\n\n

Is a discounted mortgage a good option?<\/strong><\/h4>\n\n\n\n

A discounted mortgage is offered by lenders that want to attract you to\ntheir more expensive SVR by dropping their rates temporarily. The discount will\nbe offered for an introductory period \u2013 usually between two and five years \u2013\nafter which you\u2019ll be back on their more pricey mortgage.<\/p>\n\n\n\n

If you\u2019re struggling with the initially high costs of home ownership in\nthe first few years of buying, a discounted mortgage can help significantly \u2013\nbut you need to consider whether this is the right option or if fixing your\nrates would be better. It\u2019s also possible to find a discounted tracker\nmortgage, which can be very competitive.<\/p>\n\n\n\n

If you choose a discounted mortgage, you need to be careful about what\nhappens when the introductory period ends. It\u2019s important to understand if and\nwhen you can re-mortgage, and anticipate how much your monthly repayments could\nincrease by so that you are clear on what you can afford in the future.<\/p>\n\n\n\n

Should I consider an offset mortgage?<\/strong><\/h4>\n\n\n\n

An offset mortgage is when your lender takes into account how much you\nhave in a savings account with them, and knocks that amount off the debt that\nthey charge interest on. For example, if you have \u00a310,000 in savings, and a\n\u00a3100,000 mortgage, you would only pay interest on \u00a390,000.<\/p>\n\n\n\n

This type of mortgage can help you to reduce the amount of interest you\npay on your loan. It also gives you the flexibility to pay off more of the\nmortgage when you have more money, but then to reduce your payments when you\nneed a bit more to spend.<\/p>\n\n\n\n

The downside of an offset mortgage is that you won\u2019t earn interest on\nthe savings that you have with the lender. They also tend to have slightly\nhigher interest rates.<\/p>\n\n\n\n

First time buyer mortgages<\/strong><\/h4>\n\n\n\n

Many mortgage companies have special deals for first time buyers, which are\ngenerally aimed at helping people get on the property ladder. These types of\nmortgages usually accommodate having lower deposits (i.e. the ratio of the\nmortgage to the value of the property can be higher) and have lower application\nfees.<\/p>\n\n\n\n

In general, first time buyer mortgages can be very helpful at a\ndifficult time \u2013 but do still check out the rest of the market in case there\nare some particularly good deals.<\/p>\n\n\n\n

What about a guarantor mortgage?<\/strong><\/h4>\n\n\n\n

A guarantor mortgage is when a relative acts as a guarantor and agrees\nto make the mortgage repayments if you can\u2019t. You can usually borrow a larger\namount than you would be able to on your own.<\/p>\n\n\n\n

How do I find the best mortgage?<\/strong><\/h4>\n\n\n\n

Talk to an Independent Mortgage Broker. They can talk through your personal situation\nand help you choose the type of mortgage that best suits your needs. They are\nalso aware of many of the best deals on the market, and they\u2019ll have access to\nbroker-only offers that you won\u2019t get elsewhere.<\/p>\n\n\n\n

They are also able to look at lenders affordability as you could find\nthat different lenders will offer vastly different mortgage amounts depending\non your situation.<\/p>\n\n\n\n

You can contact one of Temple\u2019s mortgage advisers through our Contact Us<\/a> page, Facebook<\/a> page, or by contacting our office on 01329 282882. Alternatively, take a look at our Temple Mortgage website<\/a> to find out more.<\/p>\n\n\n\n

Your home maybe\nrepossessed if you do not keep up repayments on your mortgage.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

There are many choices to make when looking for a mortgage. There are literally thousands of different types of mortgages on the market and choosing the right one can be daunting. But before deciding which mortgage to go for, you need to decide what type of mortgage to get \u2013 repayment, interest only, fixed, tracker […]<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[40],"tags":[41,55],"acf":[],"yoast_head":"\nFinding the Right Mortgage for You - Temple Wealth<\/title>\n<meta name=\"description\" content=\"There are literally thousands of different types of mortgages on the market and choosing the right one can be daunting.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.templewealth.co.uk\/finding-the-right-mortgage-for-you\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Finding the Right Mortgage for You - 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There are literally thousands of different types of mortgages on the market and choosing the right one can be daunting. But before deciding which mortgage to go for, you need to decide what type of mortgage to get \u2013 repayment, interest only, fixed, tracker…","_links":{"self":[{"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/posts\/72349"}],"collection":[{"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/comments?post=72349"}],"version-history":[{"count":0,"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/posts\/72349\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/media?parent=72349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/categories?post=72349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/tags?post=72349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}