Taking out your first-ever mortgage is one of the biggest achievements in your lifetime and a highly significant financial commitment to make. Therefore, before you sign on the dotted line, we want to give you an insight into the different mortgages available. It is essential that you have a full understanding of the commitment which you are about to make, this guide will give you a very brief insight into the different options available.
What is a mortgage?
Initially, we want to establish what a mortgage really is and what is involved throughout the process applying for a mortgage. To put it simply for you, a mortgage is a loan which you apply for to help you purchase a home. This will consist of you putting down a deposit and the mortgage company will provide you with the remaining funds.
It is important to add that If you find that you cannot keep up with the costs of your mortgage repayments, you will be at the risk of losing your home.
What is the difference between a fixed-rate mortgage and a variable rate mortgages?
If you are currently in the process of applying for a mortgage but you don’t understand the difference between a fixed and variable mortgage deal, we have the answers for you! Knowing the difference between these mortgages can be a huge benefit when it comes to making the right decision and taking out the right mortgage for you.
A fixed-rate mortgage provides you with a fixed interest rate normally for an initial period. We can help you to see if this is the ideal product for you. Fixed rates are available for up to 10 to 15 years at present. A fixed-rate will ensure that you can budget with confidence on your monthly payment.
Whereas a variable mortgage rate fluctuates each month. They can be called different things. For Example, a Tracker rate generally fluctuates along side the Bank of England Base Rate, at a certain margin. Discounted Rates and Standard variable rates also can fluctuate.
Contact us for further information on the best product available to you.
How much can I borrow?
The main factor is your income.
If you are buying the property with someone else, your joint income will be taken into consideration when calculating the cost of the mortgage you have access to.
In addition to this, all of your bonuses, pension, overtime will be taken into consideration. However, each lender will treat additional payments and deductions differently.
So when calculating the total of the mortgage which they may allow you to borrow all additional credit commitments and credit history will also be taken into consideration. Therefore, it is key that you have a good history when it comes to repaying any loans or credit cards in your name
Finally, the mortgage lender will take a look into your monthly day-to-day outgoings, for example, your council tax, insurance policies, maintenance costs, and travel costs. This will give them a good understanding of your financial situation and from here they will deem whether or not you can borrow money from them.
It is crucial that you have a good understanding of the deal which you are about to commit to, you can control the different ways of managing your interest rates, we want to help you save money on your mortgage today!
Each lender is different and will have their own idea on your circumstances so contact us to help. The services we provide here at Winstree Financial Services will not only save you time, but we will find you find the best mortgage deal specifically for you.
For further information regarding the work we do, get in touch with our Mortgage Advisors Colchester today!