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Types of Mortgages There are many different types of mortgage now available. We have listed below some of the most popoular options. Your Mortgage Consultant can give you full details and provide you with all the help needed to find the mortgage most suitable for your circumstances: Variable Rate This is the rate Lenders generally lend money at. It is linked to the base rate set by the Bank of England and will vary in line with increases or decreases in the Bank of England Base rate. Fixed Rate This is exactly what it says. The interest rate charged will be fixed at a certain percentage for a set period of time. This helps many borrowers with their budgeting, as your repayments remain the same over the fixed rate period. Changes to the variable rate will not affect a fixed rate during agreed fixed rate period. Discounted Rate This means that the Lender will give you a discount off the Variable Rate for a set period of time. Capped Rate This is a scheme whereby the Lender sets a rate which will not be exceeded during the Capped Rate period. Unlike Fixed Rates, however, there is usually no minimum rate and therefore Borrowers can take advantage of any falls in interest rates. Tracker Mortgages These are schemes where the interest rate charged simply "tracks" a given Base Rate, such as the Bank of England Base rate. Usually the interest rate is fixed at a set percentage above [or sometimes below] the base rate it is tracking. The tracking is usually for a set period of time, although maybe for the full term of the mortgage. Cash Back Many Lenders offer a "cash back" as an incentive to place your mortgage with them. Cash back amounts vary but can be useful in helping to meet the cost of legal fees etc. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSED IF YOU DO NOT KEEP UP REPAYMENT ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. |
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