4th September 2014
Is an Interest Only Mortgage in Peterborough the Ideal Mortgage Scheme for You?
An interest only mortgage is a mortgage scheme that allows you to pay just the interest that is accrued on your mortgage. This means that when you are making your monthly repayments, these will only go towards paying the interest off and subsequently means that you will need to make alternative arrangements for repaying the bulk (capital) of your mortgage, aka the sum that you have borrowed to buy your property. So whilst you are paying off the interest on your interest only mortgage you will need to be saving money to pay off the capital of your mortgage.
Important Things to Consider with an Interest Only Mortgage in Peterborough
Interest only mortgages are not on offer from a large number of lenders, due to the fact that if property prices fall then this becomes a risk to the lender and they are not willing to put themselves in this situation. Lenders that do offer interest only mortgages will ask you for a higher deposit also.
It is also important to bear in mind that if you do not make separate savings to pay off your interest only mortgage loan, then you are likely to find it difficult to change mortgages if your interest rate increases. There is also no guarantee that you will have saved enough by the end of your mortgage term, so that you can pay off your interest only mortgage at the end.
After reading the above, you may be thinking ‘why would I ever want an interest only mortgage?’ and this is a fair question. However, when you are paying just the interest on your mortgage and saving to pay the actual mortgage off, these repayments are an equivalent to paying rent. So why not just pay rent? Interest only mortgages can offer more appealing rates which means paying this can often be cheaper than paying rent.
If you would like to know more about interest only mortgages so that you can see if it might be a suitable option for you, then speak to The Mortgage Broker Protection Ltd. Their experienced mortgage brokers can discuss with you all of the aspects of an interest only mortgage and help you to establish whether you are eligible. The Mortgage Broker Protection Ltd work for you and not the lender, which means that they will only offer you mortgage products that will help you in the longer term. Their advice is without obligation so you really don’t have anything to lose, call 01733 304 145 today and find out more about interest only mortgages.
Upon application a fee of up to £495 will be payable (typically £195)Tags: interest only mortgage