Getting a Mortgage

Getting a mortgage

Getting a mortgage is one of the biggest commitments you make, doing it right can save you money doing it wrong can cost thousands and tie you in to the wrong product. Get our advice and help and save £s.

The tips below will help you get a good knowledge base and help you understand mortgages in more detail. Which could help you make the right decision on getting a mortgage. Or let us do the work for you!.

1.Repayment mortgage or interest only mortgage? It's vital you get this right. There are several ways to repay your mortgage. The important things to consider are how you'll repay the mortgage at the end of its term and to understand whether a repayment or interest-only mortgage is right for you and you circumstances.

2. A repayment mortgage is the less risky of the two and means that your monthly mortgage repayments repay both the capital borrowed and the interest charged, guarantying that as long as you keep paying your mortgage will be paid off the mortgage by the end of the term.

3. With an interest-only mortgage, is a higher risk as your monthly mortgage repayments only pay the interest charged on the capital borrowed, never reducing the balance, so you will still owe the amount you borrowed plus any fees added at the end of the term. If you take out a separate repayment vehicle, this can be used to pay of the balance at the end of your mortgage term examples of these are an endowment policy or an ISA. Interest-only mortgages will look cheaper as the monthly payment will be lower, but you must remember to calculate in the extra costs of your repayment vehicle.

4. What type of mortgage do I need? This will need to be considered when getting a mortgage. Your mortgage should be based on your needs and thoughts regarding the current economic market and what you think will happen in the future. If you get this right you could save £s If you get this wrong your payment may increase and become unaffordable.

5. A fixed rate mortgage, the monthly payments are fixed for a period of time (normally 2 – 5 years), fixed rate mortgages are good for those who want security, as you will know what your monthly payments will for the fixed period of time. You may be charged for this privilege fixed rate, as upfront fees and early redemption charges are common with lenders as the take the gamble on interest rates rising or falling. Take a look at our current mortgage calculator to compare the latest deals on offer.

6. A variable rate mortgage, the monthly payment are flexible you pay the mortgage lenders' standard variable rate, your payments can go up or down in line with market conditions. Normally the fees charged aren't as high as for fixed rate mortgages. Variable rate mortgages should only be considered if you don't need the security of knowing what your monthly repayments will be and during a climate where interest rates are declining. Take a look at our current mortgage calculator to compare the latest deals on offer.

7. A discounted variable rate? The same as a variable mortgage but the mortgage lender gives a discount off the variable rate for a set period of time. The mortgage repayments can still go up or down in line with the market.. Discounted variable rate mortgages are normally cheaper than variable rate mortgages, however you will normally be charged higher arrangement fees. Take a look at our current mortgage calculator to compare the latest deals on offer.

8. A tracker mortgage? Tracker mortgages are linked to either the Bank of England base rate or the LIBOR rate. Your payments can go up or down in line with market conditions. With a tracker mortgage you are guaranteed to benefit from any interest rate reductions your mortgage will track the Bank of England base rate or the LIBOR. Tracker rate mortgages should only be considered if you don't need the security of knowing what your monthly repayments will be. Take a look at our current mortgage calculator to compare the latest deals on offer.

9. A flexible or lifestyle mortgages? Flexible or lifestyle mortgages are really features on a fixed or variable mortgage that let you make extra payments or take payment holidays. Making extra payments on your mortgage can save you money by reducing the overall amount of interest you'll pay, but your money will be tied up in your property, meaning you won't be able to access it quickly in the event that you need to. Payment holidays offer great flexibility (e.g. you don't want to pay the mortgage for a couple of months due to the arrival of a new baby), but you still incur interest thus increasing the total amount you have to pay back. Some mortgages only let you take payment holidays if you've made previous overpayments or after making a set number of repayments.

10. What about current account or offset mortgages? Current account and offset mortgages are fixed or variable rate mortgages that are linked to your current account and/or savings account. They work on the basis that the money in your current account and/or savings account is used to offset the interest paid on the mortgage debt. For example, if you had a mortgage of £100,000 and savings of £20,000, the interest you would be charged on your mortgage would be on £80,000. You don't get paid any interest on the money in your current account or savings account, but these types of mortgages can be good for people paying the higher rate of tax on their savings. You can also access your savings more easily than if you had made extra payments on your mortgage. It's important that you compare the mortgage rates and fees (or 'true cost') for current account and offset mortgages against other types of mortgages to make sure that any benefit in paying less interest isn't eroded because you're paying a higher interest rate than you could have got with a fixed rate mortgage for example.

11. Can I get cashback? Cashback mortgages offer a lump sum when the mortgage is taken out, which can come in handy when paying all the costs of moving home. Cashback mortgages usually have a lock-in period where you'll be charged an early redemption penalty if you re-mortgage to another lender before the end of the lock-in period. It's also important to compare the rates and charges against other mortgages so that you know what the overall or 'true' cost of the mortgage is.

12. Don't be scared to use a mortgage broker. Mortgage brokers can help get the right mortgage to suit your needs and sometimes have access to 'exclusive' deals that you can't get elsewhere. But, if you use a broker it's good to go armed with a good understanding of the latest deals, and make sure that you choose a broker that's 'whole of market' and not just restricted to a small panel of lenders.

Are you still confused let EFS do all the hard work and help on getting a mortgage to suit your needs and circumstances.

Fill out the form below or call us for us to help you on getting a mortgage.





Commercial Mortgages and Buy to let mortgages are not typically regulated by the FSA


We do not charge a fee for mortgage advice. A fee based option is available of typically 2% of the mortgage amount.
For example on a loan of £25,000 the fee would be £500

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