Mortgage Advice

How much do I need to budget?

It is no secret that a mortgage is a huge financial commitment. The decision you make now could be with you for the next 25 years or more so it is very important to be realistic about what you can afford. It can be tempting to borrow as much as you possibly can. However with owning a home there will be additional costs that you probably won’t have when renting and of course you are now responsible for the upkeep of the building; no running to your landlord when the washing machine breaks down.

Be frank when planning out what you can reasonably afford. If you are buying as couple consider what would happen if one of you lost your job, would you be able to continue to meet your monthly payments without eating up all your savings?  One area that Mortgage Brokers work with you on is to help work out affordability to make sure our discussions are about you and your situation.  

What is remortgaging?

Simply put remortgaging is when you change your mortgage provider. Effectively you are taking out a new mortgage. This could mean that you are paying off what remains of the amount you initially borrowed or you are borrowing more money against your property.

When to remortgage?

If you were to find a better deal on broadband or your mobile phone you wouldn’t hesitate to switch providers so why the reluctance when it comes to your mortgage?  Many people think that remortgaging your home is a complicated process when in fact it can be relatively simple and save you a bundle of money into the bargain.

• Your current provider won’t let you overpay your monthly repayments
• Interest rates could go up and you want to get a better deal
• The deal you are on is coming to an end so you want us to shop around for a better option
• You want to borrow more money against your home

When not to remortgage

There are occasionally circumstances when it might not be in your best interest to re-mortgage

• If your circumstances have changed for the worse
• You have a small mortgage debt
• You already have a great deal or rate; If it ‘aint broke don’t fix it!

We can help you understand when you do and don’t want a new deal.

Useful Terminology

When shopping for a mortgage these are the terms that you will hear most often, be sure you understand them and remember that we will always be happy to explain them in more depth.

Repayment mortgage

This type of mortgage will see you paying back a monthly amount that covers both the initial amount that you borrowed and the interest that accrues on it. By the end of your mortgage term you will have paid off everything that you owe.

Interest only mortgage

This mortgage does exactly what it says on the tin; your monthly repayments only cover the he interest that accrues on the original amount that you borrow. By the end of the term you will still have to pay the original amount back. With this option you will need to be sure you have a plan in place to be able to afford the end lump sum.

Fixed rate mortgage

With this option your interest rate will remain fixed at the same rate either for the length of your mortgage for a certain period of time. This type of mortgage will allow you to plan ahead as your repayments will always be the same.

Variable rate mortgage

A variable rate means that the interest rate you pay is tied to the Bank of England base rates and can fluctuate accordingly.

Repayment fees

Say you get a hefty pay bump at work and are able to comfortably pay more than your set monthly repayment. You may want to consider paying off more each month in a bid to decrease the amount of interest you end up paying on the original amount you borrowed However some mortgages will charge a fee for this so be sure to check the terms of your agreement.