You need good mortgage advice to help choose the right mortgage for you
For most people, choosing a mortgage is one of the biggest financial decisions you will make. And with hundreds of options to choose from, it can seem very daunting; how on earth do you work out which one is right for you? Our specialist Mortgage Adviser can help guide you through this minefield.
Amidst the many and varied complexities of buying a property, it is useful to know that although there are countless types of mortgages, these actually boil-down to just 2 categories:
Interest Only Mortgage
As the name implies, you are only paying-off the interest to the lender each month. This means the original loan amount remains the same for the term of the mortgage. Although this makes the monthly repayments considerably lower than a Repayment Mortgage, it is essential you think about how you will pay-off the original loan at the end of the term; typically this would be an investment solution such as an ISA or Pension.
A Repayment Mortgage is structured so that your monthly payments are made-up partly of capital and partly of interest.
This means by the end of the mortgage term you will have paid-off the original amount you borrowed and all the interest accrued as well.
The interest rate on Fixed Rate Mortgage are agreed at the outset and continues unchanged for a prescribed length of time, this is usually between one and five years.
Our Mortgage Adviser can discuss Fixed Rate Mortgages with you.
Interest rates on this type of account are usually set at a margin below the lenders standard variable rate for a set period of time. This means your monthly payments may go up and down regularly.
Our Mortgage Adviser can discuss this with you.
Capped Mortgages can give you the best of both Fixed and Variable Rate Mortgages. Whilst your payments will go up and down in line with interest rates, the maximum rate you will pay is restricted to an upper limit or ‘cap’ with some lenders also imposing a the lower limit or ‘collar’ to prevent the interest rate dropping below a specified level. These upper and lower limits are usually specified at the outset and agreed for a certain amount of time.
Our Mortgage Adviser can discuss Capped Mortgages with you.
A flexible mortgage is just a normal mortgage with some extra flexible features bolted on. The features and how they work will differ between providers so it’s important when you’re searching for a mortgage to find one that has the facilities you need.
Our Mortgage Adviser can discuss Flexible Rate Mortgages with you.
By linking your mortgage with savings and / or current accounts Offset Mortgages allow your savings to effectively reduce your debt and ultimately the amount of interest you pay on your mortgage.
Our Mortgage Adviser can discuss Offset Mortgages with you.
Tracker Mortgages work in the same way as standard variable rate mortgages, although, they track Bank of England base rate rather than the rate being determined by the lender. Therefore, if the base rate changes, your payments will go up or down directly in line with it.
Our Mortgage Adviser can discuss Tracker Mortgages with you.
Standard Variable Rate Mortgages or (SVR) – The interest rate on this mortgage is set by the lender and will usually fluctuate to follow general market conditions.
Our Mortgage Adviser can discuss Standard Variable Rate Mortgages with you.
A Buy To Let Mortgage is a loan for purchasing or refinancing residential property which is let to tenants rather than lived in by the borrower. Classed as a business transaction, rates and fees are typically higher than those you would find with a standard residential mortgage.
A standard Equity Release Mortgage (otherwise known as a lifetime mortgage), allows you to take equity from your home either as a lump sum or in smaller, regular amounts. The total amount, capital plus interest, is repaid when you die or move into long-term care.
AN EQUITY RELEASE PRODUCT WILL REDUCE THE VALUE OF YOUR ESTATE, WILL NOT BE SUITABLE FOR EVERYONE AND MAY AFFECT YOUR ENTITLEMENT TO STATE BENEFITS. TO UNDERSTAND THE FEATURES AND RISKS PLEASE ASK FOR A PERSONALISED ILLUSTRATION.
- Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.
- Our fees and charges vary depending on the Services we provide to you. We charge a fee of up to £1000 payable at the outset. Our typical fee is £750.
Typically each of these also have their individual nuances in terms of criteria, terms etc. It really is something of a mine-field. You won’t be surprised to know that we advise speaking to a specialist! Our highly-skilled Advisers here at Octagon Financial Services will help simplify the whole process for you; plus we also have access to some exclusive and specialist mortgage products.
By taking advice from one of our Advisers, you will get the advice you need to enable you to make a well-informed decision on the type of mortgage that is right for you. But it doesn’t end there, because our ethos is to stay with you on your financial journey, we will regularly keep in touch so if your circumstances change, or when your current “deal” is due to expire, you will once again be presented with solutions to suit your current situation.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. OUR FEES AND CHARGES VARY DEPENDING ON THE SERVICES WE PROVIDE TO YOU. WE CHARGE A FEE OF £595.00 WHICH IS NON-REFUNDABLE AND PAYABLE AT THE OUTSET. WE WILL ALSO BE PAID COMMISSION FROM THE LENDER WHICH WILL BE DISCLOSED TO YOU.
THE FINANCIAL CONDUCT AUTHORITY DO NOT REGULATE MOST BUY TO LET MORTGAGES