Whether you are about to buy your first home or you are merely adding to your investment portfolio, mortgages are something that you always need to be fully aware of. In fact, if you are not careful the mortgage always has the potential to be a real headache, and for that reason you are going to need to make sure that you are aware of how to approach this. The more you know, the better equipped you are to find the right mortgage for you, and to get a good deal ultimately. In this post, we are going to look at all of the major things you need to know about mortgages, to make this process so much simpler and easier.
Everything You Need To Know About Mortgages
What Is A Mortgage?
So we’ll start with a real basic, just to ensure we have covered the ground properly. What exactly is a mortgage? Simply, it is a long-term loan that is taken out to help pay for a property. Most people don’t have the money to simply buy a house outright, so they need a mortgage to pay for the majority of it – while also having to put down a deposit on the property early on too. Generally, a mortgage is taken out from a bank or building society.
How Long Do Mortgages Last For
It obviously depends on a number of factors: how much is borrowed, the interest rate and repayment schedule, how much you earn and whether you are able to pay any off early, and so on. But as a standard rule of thumb, most mortgages last for 25 years. However, the term can be longer or shorter than that.
How Much Is The Deposit?
As we have seen, you will always need to put down a deposit on the property at the first instance, and this is normally a prerequisite for being able to take out the mortgage itself. The deposit is generally ten percent of the total value of the property, although this can vary too. If you are able to pay more than that as a deposit, you will generally want to do that as far as you can, so that you have less money to pay back in the mortgage. For more on this, see money.co.uk.
Finding A Good Deal
Probably the most important thing that you need to think about when getting a mortgage is making sure that you research and compare mortgage rates to get a good deal. However, that is often easier said than done. One of the best ways to make sure of this, however, is to use an online mortgage calculator such as MortgageCalculator.Org. With the help of a tool like that, you are going to find it so much easier to make sure you are getting a good deal on your mortgage.
Types Of Mortgage
It’s good to bear in mind that there are a range of different types of mortgage you can choose from. Knowing the types will help you to find one that you really need, rather than just any old mortgage, and it will often put you in a much better position on the whole. Some of the types of mortgage include:
- First time buyer
- Help to Buy
- Right to Buy
- Bad credit
- No deposit
You should be able to determine if any of these are particularly suited to your circumstance. If not, a general mortgage is probably all you need to go for.
In order to determine how much you are going to be paying back, you have to be aware of the interest rate attached to your mortgage. There are a few major types of interest rate that a mortgage can have, and you need to be aware of their differences. The two main types of interest rate are: fixed and variable. With a fixed interest rate, the rate does not change at all over time, and it will generally be slightly higher than a variable rate. A variable rate may change, but it is probably going to start a little lower and rise over time.
There is no right or wrong when you are choosing between mortgages of these different types – you just need to be aware of their differences and try to make the right decision for you at this time.
As you can see, there is a lot to know about mortgages. One important thing to remember is that you should never rush into getting a mortgage, and you should always do your research before you sign your name. As long as you do that, you are going to be much safer.