- What kind of mortgage is best for you ?

Repayment, Endowment, Tracker, Offset, Overpayment, Low Start.......

Poems, Songs, Stories + .... Visit our Online eStore

Look at :- Learning Truths . Homeschooling . PC Learning . On doing a Degree . CGP Educational books . Using Maths Sheets

Or see :- Puzzles . Games + daily joke . Grimsby Poets Corner . Daily News stuff . A Learning Holiday . Arsenal .... HOME

Site Search at bottom, v
A loan for buying property with, is the basic mortgage definition. Generally if you need or want a mortgage, then you can easily get a mortgage that is not the best one for you. Mortgages are often mis-sold by sellers or brokers claiming to be experts. One day they all push Endowment mortgages, then Repayment mortgages or Low Start mortgages or Overpayment mortgages or Fixed Rate mortgages or Offset mortgages - and each type will also have different interest rates available. For a first time house purchase or for a refinance, lower interest rates are best of course for any one kind of mortgage. But different kinds of mortgage may best suit different people, even if they do not have the same interest rates. For many a mortgage is the only possible way to buy a property, but for some a mortgage is profitable cheap money costing maybe 5% net to free-up other money for investing at a higher return maybe 10% net.

Savings and income small. A normal Repayment mortgage should be best if you can get one for the property that you want and you can afford the payments. (Some sellers may help on a deposit or furnishing, or offer Shared Ownership or Homeown schemes.) Otherwise, if your income is likely to be rising then a Low Start mortgage might allow you to buy a better property or to have lower payments. As an alternative to a low start mortgage, a young new graduate might reasonably consider a permanently low payment interest-only mortgage or endowment mortgage linked to eg a pension, though at the end of it gambling whether some net lump sum may be collected or be owed.

Savings small and income large. A normal Repayment mortgage should be best if you can get one for the property that you want. (Some sellers may help on a deposit or furnishing.) An Overpayment mortgage will be better if you prefer to pay off your mortgage early, but an Offset mortgage linked to your current account could help with that more cheaply.

Savings large and income small. A smaller Repayment mortgage may be best, but if you can invest your money at a better net return than the mortgage interest rate that you can get then you should get the biggest Repayment mortgage that your income can reasonably afford.

Savings and income large. If you can buy the property you want without a mortgage, then only get a mortgage if you can invest your money at a better net return than the mortgage interest rate that you can get - and in that case get the biggest Repayment mortgage you can afford.

Initial mortgage payments must be affordable for you, leaving enough of you income for normal bills and expenses. (If your income is small then a mortgage taking 30% of your income may be difficult for you, but if your income is larger then 50% of your income may not be difficult for you.)

Mortgage payments in later years. The actual money cost of a normal 'variable' mortgage is fixed for the life of a mortgage IF interest rates do not change, so that the real cost tends to fall in later years. BUT if interest rates rise then the money cost of your mortgage could rise a lot for a year or two and make it difficult to keep up payments. Many partly 'insure' against this by taking a slightly dearer mortgage with the first few years held at a fixed interest rate. And if sickness or unemployment might make paying a mortgage difficult, then you can get mortgage insurance to cover that. If you have a bad credit history then you will be offered only somewhat higher interest rate mortgages.

NOTE :- IF you want to buy a property to rent out then you may need a commercial Buy To Let mortgage, though recently some lenders like HSBC have moved to doing standard private mortgages for Buy To Let. Commercial Buy To Let mortgages have some special aspects, as discussed elsewhere on this website, but you can find different kinds as with private mortgages. The most common Buy To Let mortgage is a variable repayment mortgage that approximately follows any base interest rate changes like a Tracker mortgage but without an exactly specified tracking rule (instead lenders generally following market interest rate changes).If you want to buy a property to rent out then you may need a commercial Buy To Let mortgage, though if you are a landlord with multiple properties, then you may be better suited with a specialist lending arrangement rather than individual mortgages.

Good mortgage calculators can help you choose the best mortgage for you, but many of the mortgage calculators available are little help. If you have Excel on your home or work computer, then the best ones available are explained HERE.

PS. There is also something called a 'reverse mortgage' or 'lifetime mortgage' which is basically an equity loan to generally older property owners, to release the equity in their property either as a lump sum or as periodic income payments. The homeowner's obligation to repay the loan is usually deferred until the owner dies or the home is sold. If a reverse mortgaged property increases in value, it may in some countries be possible to later get a second reverse mortgage on its increased equity. An alternative especially for older homeowners is 'Sell And Rent Back' where the owner sells their house to a company but continues living in it by renting it from the new owner.

We also sell the best CGP school books, games and puzzles.

We sell online, as well as instore, with secure online payment by card or by Paypal account.

This website regrets seeing so many schoolchildren learning nothing but stealing and drinking, and strongly supports the social inclusion policies proposed by our sister website Social Exclusion Housing - especially regarding children - and regret that none of the main political parties seem interested as yet.

Or you may want to learn a bit about How to kiss, how to date, love, marriage

otherwise, if you have any view or suggestion on the content of this site, please contact (e-mail vincent@wilmots.me.uk):-- Wilmots
Colin Wilmot, 166 Freeman Street, Grimsby, N.E.Lincs, DN32 7AT.

You are welcome to link to any page on this site, eg www.wilmots.me.uk/mortgages.php

You can do a good search of this website, or of the web, below ; ( . OR if you like this site then

)