You might be a first time buyer in Sheffield who are looking to take that initial step on the property ladder or looking to move into a different property through moving home in Sheffield, or your mortgage term is coming to an end so are looking to remortgage in Sheffield. Either way, you’ll quickly find that there are a lot of options available for you when it comes to taking out your mortgage.
Below, we have put together an extensive list that highlights the most popular types of mortgages out there to customers on the mortgage market.
If you are interested in any of the mortgage options mentioned below and are looking for more information, then do get in touch as we will be able to connect you with a knowledgeable mortgage advisor for expert, fast & friendly mortgage advice in Sheffield & surrounding areas.
This type of mortgage means that your monthly mortgage payments will stay the same throughout the duration of your mortgage term.
You have the choice in the duration you want to fix your payments. It’s common for people to choose a fixed term of around 2,3 or 5 years or longer.
The benefit of this option is that your outgoings will probably be the biggest one in your finances, regardless of what happens with inflation, the interest rates, or the nationwide economy.
A tracker mortgage will mean you will have a mortgage interest rate that usually reflects the Bank of England’s base rate.
Because of this, the lender nor the mortgage lender will set the rate and it will fluctuate when the base rate does. For example, if the base rate goes up, your interest goes up. Therefore, if it goes down, yours will go down too which obviously would be beneficial to you.
It will require you to pay at a percentage that is higher than the Bank of England base rate. For example, if the base is 1% and you are tracking at 1% above the base rate, this will result in you paying back your interest at a rate of 2%.
A repayment mortgage will involve you paying back a combination of both the interest and capital each month. This is the mortgage people looking to buy a home usually go for.
If you have been able to keep your payments going for the mortgage term duration, you will be guaranteed to have paid it off in full and achieve the goal of owning your own home by the end of it.
This option can be seen across the industry and wider world as the most risk-free way to pay your capital back to the mortgage lender. When you begin your term, the amount you’ll be paying will be mostly the interest with your balance reducing at a slower rate. This is particularly the case if your term is 25,30 or 35 years.
Within the last ten years or so of your mortgage, the process speeds up. This means you will be paying back more capital than interest, with the balance reducing at a far quicker rate.
As a Mortgage Broker in Sheffield, we do find many buy to let mortgages being set up frequently on an interest-only basis ( this option does benefit many landlords), it is progressively more difficult these days to obtain a residential property on an interest-only mortgage.
This is due to the process because when you reach the end of your term, you are still required to pay the full mortgage amount to pay off all in one go, with no additional income to fund the amount you’re required to pay.
With this in mind, there a range of unique circumstances where this can be an appropriate route for a customer to go down such as downsizing when you are older or if you are in a situation in which you have other investments you are able to use to pay back the capital.
When it comes to offering these products, it’s common to find that lenders can be incredibly strict. Furthermore, the loan to values usually is much lower than they were in previous years.
An offset mortgage is where your mortgage lender will create a savings account that will work simultaneously with your mortgage account.
To put this in an example, if you had a mortgage balance of £100,000 and you deposit £20,000 into your savings account, you will be required to only pay interest on the difference between those figures which in this case would result in £80,000.
This option can be a very efficient way of controlling your finances, especially if you won’t be paying higher rates of tax.
Home Movers and First Time Buyers in Sheffield use a Mortgage Broker in Sheffield to help the process of purchasing a home go as smoothly as possible. Buying a home can be a very stressful experience, and our customers like to know they have got someone reliable on their side on hand to answer all their questions and queries.
Your Dedicated Mortgage Advisor in Sheffield will ensure you obtain the most suited mortgage to match your circumstances. We will recommend the most suitable mortgage for you and package your application to the Lender in such a way to give it the best chance of success. The same rules apply when you come to Remortgage too, we like to know our customers are on the most affordable deal for the entire term of the mortgage.
We think talking to a Mortgage Advisor in Sheffield early on in the process is a good idea. We can help you work out what you can afford to pay and also how much the different Lenders will let you borrow. You would be surprised by the vast differences between Mortgage Lenders when it comes to the maximum mortgage available. Knowing what you can afford well in advance of making an application helps you avoid disappointment.
Communication also plays a large part. We like to keep our customers informed about their application’s progress by email, so you know things are moving forward. It’s good to know that we are also at the end of the phone when you need us.
Mortgage Brokers work for the customer, not the Lender. This is important to note because we are in your corner sometimes having to argue the strengths of an application to ensure it goes through. We know our customer’s financial situation inside out, and by requesting and checking your proof of income and bank statements well in advance of a Lender seeing them, we look to avoid any potential hurdles before we hit them carefully.
If you need help you choose the right type of survey for your transaction and instruct a Solicitor on your behalf to carry out the legal aspects of your transaction. We are experts in completing application forms on behalf of our clients to ensure accuracy and give your application the best chance of completion.
Finally, a great Mortgage Advisor in Sheffield will love to build up an ongoing relationship with a client. It can often start with an affordability assessment and Agreement in Principle before even finding a house. Even after the purchase is complete, we keep regular contact via email and re-engage by phone running up to the initial mortgage product coming to its end. We then compare the market on your behalf once again to obtain the best remortgage deal available.