Mortgages

Whether you are Ist time buyer, home mover, a landlord or simply need a remortgage we are here to ensure you receive the
best possible outcome based upon your demands and needs. With over 20 years combined experience in the mortgage
sector we provide a seamless straightforward and friendly service as well as using our industry knowledge to help clients
that have previously struggled to get mortgages elsewhere.

Mortgage Term

Your Financial Adviser will advise you on the best number of years, also known as the term, over which to repay your mortgage. To do this they will take into account your income, expenditure and future plans to ensure that the correct term is selected for today and for your tomorrows.

It is vital the right term is selected for you. A shorter term will mean higher payments but less interest. A longer term will mean lower monthly payments but you will pay more interest back to your mortgage lender.

Your Financial Adviser will also discuss mortgage overpayments and whether this would be possible with the product and lender recommended.

Things to consider:

Lifestyle - a discussion on outgoings
Budget - for monthly mortgage payment
Income -bonus, commission, pay rises
Future plans -what financial commitments may you have in the future
Costs - how much will the mortgage product and advice cost you

Repayment Options

There are two types of mortgages:

1. Repayment
2. Interest Only

Your Financial Adviser will discuss which is the most suitable for you.

Repayment

  • Each monthly payment you make is a combination of capital and interest
  • You will therefore be gradually reducing your mortgage loan
  • At the end of the term your mortgage will be repaid in full providing you have kept up to date with payments
  • This is the safest type of mortgage
  • Loan amount / mortgage outstanding

Interest Only

  • Not all lenders offer this type of mortgage
  • Each monthly payment you make is interest only and therefore the monthly payment is low but you will not be paying any capital off the loan
  • Therefore, at the end of mortgage term you will still owe all of the mortgage amount borrowed at the start
  • It is your responsibility to ensure you have a strategy in place to repay the mortgage in full at the end of the term, this is usually in the form of savings or an investment
  • Loan amount / mortgage outstanding

Mortgage Products Explained

Your Financial Adviser will explain the different types of mortgage products available and recommend the right product for you based upon your circumstances.

Mortgage products fall into 2 categories:

1. Fixed Rate - a product where the rate is guaranteed and will not change during the fixed period. These are usually 2, 3, 5 or 10 year periods.
2. Variable Rate- where the interest rate can go up or down during the fixed period. These are known as capped, discount or tracker mortgages and usually are for 2,3 or 5 year periods.

Fixed Rate Products

  • You will pay the same amount each month
  • Usually for 2, 3, 5 or 10 year period
  • After this you will return to the lenders Standard Variable Rate which could increase your monthly mortgage repayments
  • You can always remortgage at the end of the fixed rate period - we will keep in touch with you to discuss your remortgage options before the end of your fixed rate period

Pros

  • You will pay the same amount each month
  • Usually for 2,3, 5 or 10 year period

Cons

  • Often has Early Repayment Charges and arrangement fees
  • You will not benefit from interest rate reductions during the fixed period

Variable Rate Products

1. Base Rate Tracker

  • The interest rate charged is usually a % above or below the Bank of England's base rate (BBR)
  • Usually for a 2, 3, or 5 year period
  • After this you will return to the lenders Standard Variable Rate which could increase your monthly mortgage repayments
  • The rate reverts to the lenders Standard Variable Rate once the period ends which could increase your monthly mortgage payments

Pros

  • Payments accurately reflect the interest rate at that time
  • You may benefit from immediate interest rate reductions

Cons

  • Often has Early Repayment Charges and arrangement fees
  • You are not protected from interest rate rises
  • You may find budgeting difficult as the monthly payment can regularly change

2. Capped

  • This is a type of variable rate mortgage that has an upper limit (the cap) on the maximum interest you could be charged during the product period.
  • The rate has no lower limit restriction which allows you to benefit from potential rate drops
  • The initial rate you start on may be higher than others and the gap between the start rate and the cap can be considerable

3. Offest

  • Your savings will be offset against the value of your mortgage
  • You will only pay interest on your mortgage balance minus your savings balance
  • You cannot earn interest from your savings Mortgage payments may go up or if you make a withdrawal from your savings
  • Can be beneficial if regular lump sum bonuses are paid

4. Discount

  • A special offer set below the lenders Standard Variable Rate for a fixed period (usually 2 years)
  • It is a variable type product that moves in line with the lenders Standard Variable Rate movements
  • You can benefit from rate reductions and it offers a true discount
  • You may struggle to budget as there is no limit to rate rises, or frequency of rises