The Most Common Mortgage Types
If you live in the UK and want to buy a house, you will need a
mortgage. At first it seems overwhelming but with a little
information you can be prepared for one of the biggest decisions
of your life.
Buy to Let Mortgage
Buy to let mortgages are intended to for people waning to let
the house after you buy it. You can choose a capital and repayment
or an interest only.
Capital and Interest Mortgages
This is the most common type of home loan. The house belongs to
you after you pay it off, which normally takes about 25 years.
You don’t end up paying about twice the price of the home
in interest because the bank makes money off the interest.
This is similar to an interest only mortgage, except you pay money
into an endowment linked to the house. The endowment pays off the
capital at the end of the mortgage loan.
Capped Rate Mortgages
The interest in capped rate mortgages is still variable and will
go up and down. The big difference is the interest is capped and
will never go above the cap.
This has a discount interest rate at the beginning but goes back
to normal after a period of time.
Adverse credit Mortgages
This mortgage is for those with a bad credit rating.
Shared Ownership Mortgages
Also known as a right to buy, this is where a housing organization
allows you to purchase a property at a discounted rate.
This type of mortgage can be great or horrible. Get some solid
advice before choosing this one.
Interest Only Mortgages
Here, you pay the interest on the loan. Then at the end of the
loan you must pay off the capital.
Fixed Rate Mortgages
The rate stays the same for a set amount of time before fluctuating.
Self Build Mortgages
This is done in stages as you buy and build on a property. However,
the payments are still due even if you are behind schedule in building.
For Independent information about mortgages try this web site.
These are the most common kinds of mortgages. First, choose
a couple that sounds like it would fit your situation. Then,
this information, do a little more research to determine exactly
which mortgage is best for you.