Mortgages Dorset: The mortgages basics

As you can see from our site, there is a lot of information about mortgages to take on board and it can be difficult to know where to start. What basic information about mortgages do you need to know?

What is a mortgage?
In order to purchase property we often have to borrow money from lenders. This money is then paid back over a fixed period of time. A mortgage is in fact the lender’s security for the money they have lent you. This means they can use the money from the sale of the house should they ever need to recover any debts.
Is there more than one way to pay back the money borrowed?
Yes, there are a few basic ways to pay back the lenders: a Repayment Mortgage, an Interest-only Mortgage or a Flexible Mortgage.
Repayment Mortgage
With this type of mortgage you can pay back a set monthly amount of money which will consist of the actual money you borrowed (the capital) plus a share of the interest on the money you borrowed. At the end of the agreed period of time (usually 25 years) you will have then totally paid off the mortgage. This is considered to be the least risky type of mortgage repayment.
Interest-Only Mortgages
As the name of this type of mortgage repayment states, the monthly repayments made to the lender only cover the interest owing on the amount of money borrowed. This means that you do not pay off any of the capital you have borrowed. Therefore, at the end of the fixed period of time (usually 25 years) the actual money borrowed (e.g. the capital) remains the same as when you first borrowed the money. You must find a way of saving the money in order to pay off the outstanding money at the end. There are a number of options for doing this including paying into an investment fund (ISAs being an example of this)
Flexible Mortgages
This allows you to pay a different amount of money every month dependant on your monthly salary. This is particularly used by people who have a fluctuating monthly income.
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/Mortgages/index.htm

Mortgages Dorset: First time buyer’s Mortgage

Mortgages often cause stress in experienced people looking for the best remortgage deals, so what chance have first time buyers got? Are you a worried first time buyer? The rising house prices, not only in Dorset but also throughout the UK, have caused a great deal of concern for most of us. However, for many first time buyers thinking about taking out their first mortgage, the rising house prices are making them nervous about even looking into buying their first houses. In fact, it might not be as daunting as it first seems. So, what do you really need to know about getting your first mortgage?

There is a solution to most things in life and getting your first mortgage is no exception. If you are prepared to do a little research and ask for advice you will find that there will be a mortgage to suit your personal needs. Recent surveys suggest that more and more first time buyers are using the Internet to do this initial research, so why not follow their lead? Initially you should be researching:

·         Houses prices in the UK in general

·         Deciding upon which area you would like to live in, e.g. Dorset

·         The prices in that desired area (and whether this is affordable)

It is then essential that you sit down and work out how much money you have for the deposit and how much you will be able to afford to spend on your mortgage repayment each month.

Armed with these pieces of information you should then seek the advice of an independent mortgage adviser.  Here are a few guidelines for how to tackle this initial meeting:

·         Don’t be afraid to ask questions

·         Ask about special deals for first time buyers

·         Make sure the adviser gives you a range of mortgages to chose from

·         Check if you might be able to use your parents as guarantors for your mortgage

The main thing is to be up-front and honest. Remember; a good, professional Mortgage Adviser will do their up most to find the best deal out there for you. At MEM Mortgages this is certainly our top priority. We aim to provide all of our customers with the best mortgages out there so that they will come back to us again and again. If you are a first time buyer and want to discuss any of the above or you would like to know where to go from here on in simply give us a ring and one of our experienced advisers will be more than happy to help.

International mortgages

There are literally hundreds of different types of mortgages out there. At Liberty Financial Consultants in North Yorkshire we can give independent advice on any type of mortgage, so you know we can find the best mortgage for you. Surveys suggest that advice on international mortgages is being increasingly sought after. So, what is an international mortgage?

International mortgages work more or less in the same way to normal mortgages for properties being bought in North Yorkshire and throughout the UK. That is to say that you borrow money from a lender in order to buy your house and the lender uses the house itself as security for the money they have lent you. This money is then paid back, usually on a monthly basis over a fixed period of time. International mortgages, however, are specialised mortgages for buying properties overseas and as such there maybe different penalties or taxes involved (you should always check this with your mortgage adviser). If you do some research and chose the right market, buying a property abroad can be a fantastic investment.

There are many different types of mortgage depending in the country you want to buy in and an experienced mortgage adviser will be able to advise you on these different mortgages. However, generally there are two basic types of international mortgage:

Repayment Mortgage
You re-pay a set monthly amount of money which consists of the actual money you borrowed (the capital) plus a share of the interest on the money you borrowed. At the end of the agreed period of time you will have then totally paid off the mortgage.
Interest-Only Mortgages
The monthly repayments made to the lender only cover the interest owing on the amount of money borrowed. You do not pay off any of the capital you have borrowed. At the end of the fixed period of time (usually 25 years) the actual money borrowed (e.g. the capital) remains the same. You must save money in order to pay off the outstanding money at the end.
Tips on International Mortgages

·         calculate the costs of visiting the property before you buy

·         discuss tax and conveyance fees with your mortgage adviser

·         check how much stamp duty you will have to pay

http://www.guardian.co.uk/money/2011/mar/26/french-holiday-homes-recovery

Mortgages Dorset: Re-mortgaging

Are you thinking of re-mortgaging? There are many different reasons for wanting to re-mortgage: maybe you are moving home, looking for homes for sale in florida or wanting to reduce your monthly outgoings or even just wanting to go on a little six month break along the Dorset coast. Whatever the reason for wanting to re-mortgage you need solid, dependable advice before taking the plunge.

Many believe that with the soaring house prices it has never been a better time to re-mortgage your house but what different aspects do you need to consider before you decide to go down this route? Read up on these comprehensive re-mortgaging tips:

·         Seek advice from a broker who has access to the maximum number of lenders possible and can therefore aid you in considering all the different re-mortgaging possibilities.

·         Be sure to read all the information about “tie-ins” and “penalties”. If you opt for a mortgage which penalises for switching mortgage lenders or ties you to a lender for a fixed period, make sure you know about it before you sign.

·         Be sure you understand and know the terms of your current mortgage agreement before looking into re-mortgaging and then you can make an informed comparison.

·         Be aware of any “early repayment charges” which you may incur should you decide to pay off your mortgage before the agreed time period.

·         Resist the temptation to extend the length of your current mortgage term. Often it appears to be cheaper but it costs more overtime when you take into account the total interest you will pay.

·         Remember to calculate all the fees involved in re-mortgaging. Areas to think about are: the legal fees, the valuation fee (you will be required to re-value the cost of the house) and the arrangement fee (money paid to the lender for the re-mortgaging paperwork involved)