How To Get The Most Out Of Your Mortgage

On July 19, 2019 by Himanshu Shah

Here at my decorative, we are always striving to help you find the best deals to fund your luxury home interiors. What better way to do so, than by finding the best mortgage to suit your needs?

We have put together this handy guide to compare mortgages with moneyexpert.com.

Whether you’re looking for a first home, to remortgage or a Buy to Let, then this will give you the definitive low-down of all you need to know.

Mortgage Definition And Calculator

Firstly, let’s look at the definition of a mortgage and the different types out there.

A mortgage is a loan taken out against your home, usually paid back over 25 years. If you are unable to pay it back, the lender can repossess your home. A deposit has to be paid upfront to the lender, and the mortgage provider pays the rest. This is known as a loan to value ratio. To find out how much you can borrow us an online mortgage calculator. If you want to see how much people borrow, take a look at these statistics.

Basic Mortgage Types

  1. Home Mover

Home Mover

These are for people who have a home to sell and want to move to a new one.

You can:

-Buy a new property outright or borrow the bare minimum to keep your cash flow positive.

-Use some of the cash from your sale to pay off your existing mortgage and the rest as equity toward your new home. This may incur exit fees.

– Carry the mortgage over to your new home.

  1. First-Time Buyers

First Time Buyers

These require a 5 or 10 % deposit meaning a high LTV ratio. Higher interest rates are usually payable. A Help to Buy scheme also exists, which helps people get on to the property ladder by providing equity loans of up to 20% of the home’s value. The loan is interest-free for five years.

  1. Remortgaging

Remortgage

Most mortgages come with an initial promotional period with lower interest rates. Remortgaging can help you find a better deal by switching to a new provider and using the new mortgage to pay off the existing one at the end of this mortgage deal.

  1. Buy-To Let

Buy To Let Mortgage

A Buy to Let mortgage covers the loan on a property that you have bought to let out with monthly rent payments covering the cost of the mortgage and any profits made. Most BTL products are exciting only, so the amount borrowed won’t go down over time and has to be paid back at the end of the mortgage term.

A repayment loan pays off the amount borrowed (principal) as well as the interest. Monthly payments are higher, but you will own the property outright at the end of the mortgage term.

  1. Interest Rates

Affordable Interest Rates

Mortgages can be set at a fixed, variable or tracker rate of interest. To compare the amount repayable carefully so you can have plenty left to spend on your home décor.

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