Mortgage guide
There is no simple mortgage guide available, as each mortgage is dependent on your individual circumstances and financial ability. With home mortgages restricted in the current market, it is important to find the right mortgage for you. This means one that does not put you under unsustainable financial pressure.
Mortgage guide – Type of mortgage
Our mortgage advice begins with the type of mortgage you are after; fixed rate or variable. A fixed rate means that you know exactly how much you have to pay back each month. The drawback is that you are tied into the contract, and you may face a penalty should you wish to move to a different package with a better rate. A variable rate is more suitable for those who can cope with changing market conditions and interest rates. These type of home mortgages may be appealing originally, but they run the risk of increased interest rate rises in the future.
Mortgage guide – Repayment options
The choice is yours whether your mortgage will be a repayment or an interest-only package. With interest only you simply pay the interest that accrues on your debt, but are left with the amount to pay at some point in the future. These have become rarer in recent years and you are likely to need a bigger deposit and proof of financial ability. With repayment home mortgages you will pay some interest, and some capital, each month until the debt is fully paid. These are more common and are provided by most of the major banks and building societies.
Mortgage guide – Who to choose
We have provided mortgage advice for a number of years, and choosing the right mortgage provider can be quite a scientific matter. We recommend that you choose an independent mortgage broker to access your specific situation. The broker would search the whole market to find a mortgage to suit your circumstances.
Mortgage guide – How much can you afford?
The key criteria to getting a mortgage is your ability to afford. In previous years banks used to focus on your, and your partner's, salary. However, lenders nowadays try to work out what you can reasonably afford when it comes to arranging your home mortgage. This tends to be between 35% and 40% of your monthly income. After finding out the amount you can borrow, you can then calculate the deposit you need to secure your new house, and the total repayments you will be making each month. At this point it is worth calculating how much the lender’s fees will be, to avoid any unwelcome surprises at the end of the process. The mortgage broker will be able to help with this, as they will understand the pros and cons of each lender.
Please note that our mortgage quotes are provided using the 35% of income guide.
*Monthly saving based on a £120,000 mortgage with an interest saving of 1%. Mortgage Angels initial mortgage advice doesn't cost a penny.
Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.
