As a direct result of the economic downturn of recent years, many people have had to change their aspirations. Once they may have hoped for a large house with an expensive sports car sat out on the drive. Now most people consider themselves lucky just to have a job and a regular income. So, if you’re in a position where you’re considering buying a house, then you’re in a very enviable position indeed. We understand that real estate and the hefty finances involved can make the whole process appear daunting to say the least. Well, we’re here to make sure that you make the most of your position, by helping you decide which mortgage is right for you.
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What type of mortgage you opt for will largely depend on your personal circumstances. This would include the type of employment you’re in, and even your plans for the next five or six years. So, if you intend the first house to be a starter house, and plan to move in the next couple of years, you need to take this into consideration. Most mortgages are transferable. But this is certainly something you need to discuss with your provider before making any financial commitments. The key is never to make any assumptions when you’re spending this amount of money. If ever you’re unsure get in touch with bridging experts – they’ll be able to offer you advice tailored to your personal circumstances.
Fixed Rate Mortgages
Many people choose a fixed-rate mortgage because of the sense of security it provides. Fixed-rate means that you’ll be paying exactly the same every month, regardless of interest fluctuations. So, if you’re trying to stick to a tight budget and need to account for every penny, this type of mortgage is worth considering. This means you’re protected should interest rates inflate. But you won’t enjoy any benefit should they fall below what you’re already paying.
The other thing that you need to consider is that with this type of mortgage you are fixed in for the duration. So, you need to ask yourself whether you’re in a position to meet such an obligation. Because should you be unable to meet the repayments, you will be hit with a hefty penalty fee.
Tracker mortgages are a better option for those who aren’t in a position to make a long-term commitment. The majority of tracker mortgages are available on terms that last between two and five years. However, there are also lifetime tracker mortgage deals available. The great thing about these is that they tend to be quite flexible, and you won’t face penalties should you want out of the arrangement further down the line. But the biggest difference between this type of loan and a fixed rate loan is the way the interest is calculated. The interest is directly linked to the Bank of England so you will be affected by any fluctuations. This means that your repayments could increase should interest rates rise.
Take the time to think everything over before making a decision. It’s the only way to help ensure financial stability over the next years to come.