Take A Mortgage

If you are planning to buy your first house, you must be having several issues bothering you like whether to take a Mortgage to buy a property take financial help from friends and family or simply invest all your savings and rest in peace! Well though there are several agencies and financial experts to guide, the onus lies upon you. If you are thinking of taking out a mortgage to buy a property then there are few important things which you should know.

Repayment mortgage

In this kind of mortgage the capital is slowly but steadily repaid over a period of time in monthly instalments with interest. While the interest amount goes down each year, the capital amount increases with each passing year.

 

Interest only mortgage

In this type of a mortgage only the interest of the loan is paid in monthly instalments instead of repaying the loan amount every year. The idea is you pay a long term investment which should multiply to enable you to clear the loan amount at the end of the mortgage term. However, there is a certain amount of risk involved with this type of mortgage. Though at times you may have a lump sum, in some circumstances the amount may not be enough to pay of the mortgage amount at the end of the mortgage term and you have to be ready to meet the shortfall. Interest only mortgage is usually of three types:

 

• an endowment mortgage
• a pension mortgage
• an ISA mortgage

 

If you have decided to take out a mortgage you should also finalise from whom you would be taking the mortgage. Some of the options that you can choose to take a mortgage are:

 

• banks
• insurance companies
• building societies
• finance houses
• large building companies might arrange mortgages on their own new-build homes
• specialised mortgage companies
• government backed sources

Another common choice among buyers is a mortgage broker who is actually an estate agent or insurance broker who helps people to buy a home and introduce them to a reliable source of mortgage loan. So, if you have difficulty in taking out a mortgage from a bank or building society then, you can approach the lender. However, do not forget to do a background check before you seek their advice or use their skills.

Some of the useful tips for buying a property in the UK are:

 

• Take advice of a mortgage broker to take a decision on the loan amount which you can repay comfortably
• Shop for houses. Look around and do your research, ask for the prices, all hidden costs before investing in the property.
• After placing your offer conditions, request your estate agent to take the property off the market.
• Take the services of a property solicitor for carrying out all legal aspects of the purchase. In case you are buying with a partner, update yourself with your rights and issues you need to worry in case you split. Your solicitor will also ensure that you get the mortgage on the date you wanted and sign the transfer deed in the presence of the solicitor.

 

However, the golden rule of buying a property by taking out a mortgage is ensure that you can repay the mortgage comfortably or else be prepared for the worst- repossession of your property.