Title:
Getting the right
mortgage
Word Count:
323
Summary:
Which one suits
you? What is the difference between a tracker, fixed rate and a variable?
Keywords:
mortgages, money,
finance
Article Body:
Selecting a
mortgage can be a difficult task. First of all, you need to decide which
mortgage would suit your needs best.
For those who want to know what their monthly outgoings are going to be, should
look at a fixed rate mortgage, as these are mortgages that are set at a fixed
price for a certain period, which can be anything from 1 year to 5 years.
A variable mortgage is just that, it’s a mortgage rate that changes (or varies)
with the base rate. So if the base lending rate increases so does your mortgage
rate, however the positive aspect of this type of mortgage is that if the
lending rate lowers so does your mortgage repayment. This is not for all – as
there is an element of risk involved (this was true back in the late 1980’s,
when unfortunately rates rocketed as house prices tumbled)
You may also need to think about a repayment mortgage or an interest only
mortgage.
The difference is that the latter does just that, it only pays the interests,
so whilst your monthly payments will be less, you will still have the capital
to settle at the end of the mortgage duration. However a repayment mortgage
will be a little more expensive, but at least you will be paying off both the
capital and the interest, which means ultimately your mortgage is
reducing.
When you have agreed which type of mortgage suits your lifestyle then don’t be
afraid to shop around whilst you are
still tied to a contract – as there is usually a set time when you have
the ability to negotiate another rate and/or go to another lender who is
offering you something cheaper.
I would always suggest that in today’s competitive market that you shop around,
as there are lots of different lenders with differing rates, and you need to
find the right one to suit your budget and lifestyle.