When purchasing a home most people will require a mortgage to help them get the finances they need. Finding the right one can be difficult, with understanding your needs, finding the right provider and making sense of the repayments and interest you will owe all adding up to a lot of confusion. Getting professional guidance is always a good idea and you can consult a broker if you want help searching the market for a good deal.
Interest on mortgages can be added in several ways so you can choose the best one for you. A variable rate is the most common and is based on the LTV (loan to value ratio). It can change if the Bank of England changes its own rates. A capped rate is one of the most secure options because it will ensure your interest will not rise above a set level. Discounted rates are set below the standard rate but are still able to fluctuate so you can see some periods of higher interests and others where it is lower.
A fixed rate is set for a number of years and will never rise or fall. These rates are regularly provided for a set length of time at the start of your mortgage before shifting to a variable rate. A tracker rate is set above the BoE rate but will stay in the margin for the whole duration of the deal. An offset rate is another alternative with the interest repayable depending on how much money you have in your current and savings accounts.
A fixed rate mortgage is a great help when you first take out the finance because it helps you to budget and plan ahead. With changeable rates the amount you owe can change month by month so your budgeting can be slightly off. When choosing a mortgage make sure the option you choose is suited to your needs and will work for you. It is also wise to find out what charges there will be for late payments or if you want to pay everything off early.
Getting advice from a professional property company is a good idea, especially if you are investing in properties with high values. They will have more information and should be able to advise you about providers. At Finefair we specialise in property management and act as a professional lettings agent in Hackney and the rest of London, making us your first choice for practical assistance.