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"What
Does Mortgaging Means ?" |
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A
mortgage in very simplified term refers to a document that's signed by
the borrower when a home loan is made which gives the lender a right
to take possession of the property if the borrower fails to pay off
the loan. |
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"Mortgaging
Tips" |
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Don't take
the first mortgage you're offered. |
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There are big differences in the deals you can get
amounting to many thousands of pounds. So make sure
you've made comparisons with others. |
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Shop around |
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There's a lot of competition between the mortgage
providers.
Like supermarkets they'll use techniques like offering "loss
leaders" to lure more customers (Their pay off
is that later on you're not likely to go elsewhere
because of "consumer inertia" - which
we've all got black belts in when it comes to financial
products). Look for a
mortgage lender who is offering a "loss leader"
Provided there's no
overhanging lock in you could shop around for
another good deal at the end of it and save thousands. In other words buy with a view to
get a new mortgage deal every 2 years or so. |
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Beware
Redemption Penalties |
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When you take out a mortgage you have an agreement with
the lender. This covers the amount you repay and is set
for a particular period. For example you may have a
mortgage for a three year fixed interest rate of 5%.
If you want to get out of this deal before the three
years is up you'd probably have to pay a redemption
penalty. This is a charge which supposedly compensates
the mortgage lender for the time and expense of your
leaving. Some lenders may try to hide the redemption penalties in
the small print.
Simply ask your prospective lender what the exit /
redemption penalties are. If you're not sure what they
mean ask them to spell it out. If you still don't
understand you can take it that there's something they
might be trying to hide so walk away. |
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And "Overhanging lock-ins" |
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This is a penalty for leaving a lender AFTER a special
deal interest rate has come to an end (i.e. not DURING
the agreed timescale of the deal).
So, using the same example as above, if you got a
mortgage with a three year fixed interest rate of 5% the
mortgage lender could charge you a penalty if you left
after the three years was up, say in year four.
Read enough? Just want a quote? To get your best
mortgage quote quickly and easily we can put you in contact with
a recommended mortgage adviser. It's free, completely confidential and there's
no obligation at all. Simply fill out the form below |
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FinanceLeadHouse : UK's One Stop Online Loan Resource Provider.
