Mortgages
What should I consider when choosing a Mortgage?
You need to decide first of all which payment method best suits you, i.e. repayment or interest only. To help you decide on the method most suitable for you, it would be important to take into account your attitude to risk . Only a repayment mortgage can guarantee, assuming all mortgage payments are maintained properly, that your mortgage debt will be repaid at the end of the original mortgage term.
Always check the APR of the loan you are considering, this ensures that if you are comparing various schemes, then you are at least comparing them on the same basis.
Also, bear in mind if you opted for a fixed or discounted rate loan, then your payments could increase quite a lot once the special scheme period ends, so always look at what the payments will be on the current standard rate and also on a percentage or two above this, so you wont get any nasty shocks!
If you are considering moving or remortgaging always check your current mortgage documentation to confirm whether there are any early repayment charges attached to the mortgage, as if the charge is too onerous, it may impact on your decision to change lender. Many schemes are portable which will allow you to take the mortgage on to your next property. It is worth investigating the portability option versus a new rate, because although it may not be worth paying the charges, in some cases savings could be made.
Check what arrangement fees the lender charges and whether these are refundable should you decide not to proceed midway through the application process. Any application or booking fees are normally non refundable. Also check for additional costs such as higher lending charges and whether taking the lenders buildings and contents insurance policies are a condition of the loan.
If you are a contract worker or self employed, or have other unusual circumstances then there are a range of lenders willing to consider applications for loans, complete the enquiry form for information to help you make the right choices. The best thing you can do is take independent financial advice, this will save you so much time, Clear Financial Solutions (through the association with Park Row Associates) has access to the entire marketplace, and can tailor the right scheme to suit your circumstances - email or call now - remember best advice is independent advice!
Click here to request more information about Mortgages.
Investment Property
Buying an investment property or a Buy to Let is very popular at the moment. It is also a lot easier to obtain the appropriate buy to let mortgage than it has been in the past. Many lenders now offer such facilities to individuals as well as limited companies.
In the main you will need a minimum of 15% deposit, and the mortgage should fund the remainder. The problem with this is that most of the lending decisions are based on a rental assessment. This figure then as a general guide has to cover the mortgage payment by 130%, usually at the lenders standard variable rate. Some lenders however will take account of overall affordability, and in certain cases, even the borrowers own income.
In certain circles the Buy To Let prospect seems an easy way to accumulate capital, however you need to consider a number of potential pitfalls. Firstly if house prices fall, interest rates rise, or rental yields drop then the income could be insufficient to cover the mortgage payments. You could have periods where you have no tenants, or where the rent does not get paid and you have to take legal action. There are also your legal responsibilities in terms of the safety of the building, gas and electricity supplies.
There are also taxation issues to consider. You may have to pay income tax on the rental income, after deductions for letting fees, interest payments etc. You may also have to pay capital gains tax when you ultimately sell the property.
If after considering all of these issues, you still would like to enter the investment property market, at least you will be prepared for most of the pitfalls - now all you need is the appropriate financial advice!
Click here to request more information about Mortgages for Investment Property.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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