Mortgage Options

Mortgages are one of the largest single transactions in most people’s lives. Buying a property can be a stressful and time-consuming experience, although nowadays the financing of a mortgage is a case of finding and selecting the most suitable mortgage, rather than simply accepting a lender’s offer.

Banks, building societies, and smaller niche lenders compete for your business, all offering a variety of interest rate deals, associated fees and other enhancements to attract borrowers.

The main methods of repaying a mortgage are capital and repayment and interest only. It is also sometimes possible to set this up using a combination of the two. A description of these methods is provided below.

Repayment (capital and interest) Method

Under the repayment method, your monthly repayments consist of both interest and capital hence, over time, the amount of money you actually owe will decrease. In the early years your repayments will be mainly interest and therefore the capital outstanding will reduce slowly in the early years.

This method ensures that the mortgage is repaid at the end of the term providing all payments are made on time and in full. 

Interest-only Method

As the name suggests, with the interest only method you only repay the interest on the amount borrowed. At the end of the term, the capital is still outstanding. Therefore you will usually need to take out some kind of investment policy to save up enough money to repay the mortgage at the end of the term.

Traditionally the preferred product for repaying the capital of an interest only mortgage was a mortgage endowment policy (which included a set amount of life cover) – although more recently customers are using Individual Savings Accounts (ISAs) and pensions to build up a sufficient sum and taking advantage of the tax breaks offered by these products. 

IT’S GOOD TO TALK

It’s easy to get in touch. Call now on “01337 830 844” or fill in the Contact Form and we will contact you within 24 hours.

YOU NEED TO KNOW

GO Financial Services charge a fee of £150.00 payable at the outset and £350.00 payable on receipt of a mortgage offer, however, this could be higher, depending on the complexity of your case. We will also be paid commission by the lender. Fees are non-refundable after you have received a mortgage offer. We do not charge fees for arranging Protection or General Insurance.

This site is intended for the use of UK residents only.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

%d bloggers like this: