"Many a man who pays rent all his life owns his own home; and many a family has successfully saved for a home only to find itself with nothing but a house."
Bruce Barton
Author : 1886 – 1967
THE RIGHT MORTGAGE DEAL
Finding a deal for a house is easy.
Finding a home is the real deal.
“How much mortgage will I have to pay each month?” This is normally the first thing you would ask yourself when applying for the right mortgage. The answer depends on firstly, how much you’d borrow, and then, what mortgage deal you get.
Here To Help
Finding a mortgage that’s right for you can be a complicated process. There’s much to consider and many options available for you to choose from.
Across all the pages in this section, we provide a series of guides to help you find what you should be looking for, particularly when it comes to finding the right deal for you, so when that time comes, we can help you…
CHOOSE THE ADVISER WHO UNDERSTANDS YOUR NEEDS.
Mortgage deals
There are many mortgage deals available:
- Tracker
- Fixed Rate
- Capped
- Discounted
- Variable
All may have different pros and cons, so make sure you do your research before you sign up to any deal. But first things first, what is a mortgage deal?
Mortgage deals are the agreement you draw up with your lender, showing the interest you pay and how long you’ll pay it.
The deal lasts between two to five years normally, and once expired your mortgage remains. The only change will be that any repayments and interest are worked out by the lenders Standard Variable Rate.
So how do I get a good deal?
A good deal for you may be different to your neighbours, so ensure you accommodate your life and goals when looking for your deal. It will also be impacted by your attitude to risk and credit score, so if you’re in a strong financial position, you’ll be able to see a better range of deals than those with a smaller deposit.
Comparing deals
Any mortgage is subject to interest rate increases which is why buyers often try to limit the risk by going through a deal. The main deals available include:
Fixed Rate
Fixed rate deals have a low risk and are best suited for first time buyers, or those who are a little more wary of the finance world. With one of these, you’ll be clear what your interest is for the length of your deal but if rates fall, you’ll still be paying the same interest.
Tracker
A tracker mortgage is a little riskier and benefits those who are able to pay a little more if necessary. These types of mortgages follow an external interest rate which could be higher or lower than the rate you’d pay on a fixed rate mortgage. There’s no limit on rise, which proves to be a big risk, meaning these are more popular when the external interest rates are falling, or are due to in the near future.
Discounted
A discounted mortgage deal will suit anyone looking for a low rate, with a little more in the bank and the scope to cope with more unpredictability. At a medium-high risk level, a discounted mortgage can offer the lowest rate, but only for a limited period.
Variable
The riskiest of all the mortgage deals, a variable mortgage runs alongside the lenders Standard Variable Rate which could easily rise, even if others do not. These rises can happen without warning, so make sure you are financially secure before you obtain one of these deals.
Offset
If you have a variable income but sufficient savings, this could be the mortgage deal for you. At a medium risk, the offset mortgage lets you use your savings as a backup to your mortgage. Your savings are stored in an account run by your mortgage lender, and the amount of mortgage you pay interest on is subtracted from this. It works well for those who are self-employed and have a fluctuating income.
What’s a mortgage fee?
Mortgage fees can range from small to big, depending on the deal. These fees include:
- Arrangement fee
- Booking fee
- Valuation fee
If you are buying your next home, you may have the option of keeping your current mortgage, and so may be able to avoid these set-up fees.
Finding the best all round deal
There are many factors to remember when you are looking for the best deal. An independent mortgage adviser can help you find the best deal, and tell you all the pros and cons. As well as this, they’ll search the whole market to see what’s available, maximising your chance of acceptance.
Abacus Associates manages the personal wealth of many people across the UK and over £1 billion of investments, providing clients with financial advice and access to investment products and services.
We do not charge for initial consultation meetings. If you would like a face-to-face meeting, feel free to pop over to our office or we can always can come to you.
Give us a call today on 01432 343322 and ask to speak with one of our advisers,
or email [email protected]
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Abacus Associates is a trading style of Saltus Partnership Limited which is authorised and regulated by the Financial Conduct Authority. FCA reference number: 554381
Registered office: Solent Business Park, 4500 Parkway, Whiteley, Fareham PO15 7AZ. Registered number: 07586042
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Your home may be repossessed if you do not keep up repayments on a mortgage.
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