Mortgage Advice

Mortgages can be very confusing. There seem to be so many different types, different repayment periods and so many different providers.

Where do you start?

There are basically 3 different types of mortgage

1. Repayment
2. Interest only
3. A combination of both

Repayment

With a repayment mortgage every month you pay back capital and interest so that the amount you owe reduces every month.
If you make all the agreed payments, the loan will be fully paid off by the end of the mortgage term.

However, in the early years your payments will be mainly interest, so if you want to repay the mortgage or move house within the first few years, you’ll find that the amount you owe won’t have gone down by very much.

Interest Only

With an interest only mortgage you only pay interest on the amount you borrowed. The capital amount does not reduce.

At the end of the term you must pay back the amount outstanding.

Interest only mortgages cost more than repayment mortgages over the term of the mortgage.

Part and Part (a combination of the two)

With a Part and Part mortgage part of the loan is treated as interest only and part as a repayment mortgage. Therefore, you will use both repayment and interest only methods to repay the loan.

This type of mortgage is most common with people who have an investment product, such as an endowment, ISA or pension plan which they want to use to reduce the cost of the mortgage.

Other Types of Finance

Buy to Let

Buy to let mortgages are designed for borrowers buying a property in order to rent it out. When assessing your ability to repay the loan amount, the lender will include the rental income as well as your salary.

BUY TO LET MORTGAGES ARE NOT TYPICALLY REGULATED BY THE FINANCIAL CONDUCT AUTHORITY

Bridging Finance

Bridging finance is a short-term loan, typically taken out while longer term finance is being arranged. Bridging loans can be used for many purposes including:

• Properties purchased at auction
• Property development
• Land purchase
• Property refurbishment.

BRIDGING FINANCE IS NOT TYPICALLY REGULATED BY THE FINANCIAL CONDUCT AUTHORITY

Overseas Property Finance

This provides financial support for:

• Buying your first property abroad
• Remortgaging an existing property
• Arranging the mortgage on an international property investment.

CHANGES IN THE EXCHANGE RATE MAY INCREASE THE STERLING EQUIVALENT OF YOUR DEBT

Commercial Property Finance

A commercial mortgage is basically the same as a residential mortgage, except the property involved is a commercial building.
Commercial mortgages are normally taken on by businesses so the lender will assess the creditworthiness of the business.

COMMERCIAL MORTGAGES ARE NOT TYPICALLY REGULATED BY THE FINANCIAL CONDUCT AUTHORITY

For mortgages, we can be paid by commission, a fee, or a combination of both. Our typical fee in connection with a property purchase is £495. Our typical fee in connection with a remortgage is £395.

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