What's A Mortgage?

Mortgages Muddling your Mind? Let’s break it down really easy right now and get you some advice!

So you want to buy a house huh?

First things first is a deposit! So unless you're lucky enough to have some spare thousands lying around it's time to start saving! The younger you start the better! So I would recommend starting to squirrel away some of that salary so that you can crack on with getting that deposit ready! Usually you should be aiming for around 10% for a deposit but with the government's 'Help to Buy Scheme' you can get a mortgage on just a 5% deposit!

So deposit done! Great! Now you need to start assessing how much you can afford! So take a look at your monthly salary, work out how much you spend on going out, clothes, food bills ect. And deduct that from your pay check – and that's how much you can afford!

Now it's all about getting the right mortgage for you!

Different Kinds of Mortgages:

Fixed Rate:

Does what it says on the label – you pay a fixed rate every month, despite whether the interest rate goes up or down!

Variable Rate Mortgage:

Tracks the Base rate for the Bank of England and your interest follows this! So when the base rate is low so are your repayments! However the risk with this is that it can also go up – which isn't so fun…

Repayment Mortgage:

Every Month you pay back the interest and a bit of the cash you borrowed, meaning that at the end of the loan you are all paid off and ready to go!

Interest Only Mortgage:

You pay just the interest, which means very low monthly payments! However it does mean that you would still need the full amount to cover the house at the end of the loan period.

And that’s the different kind of Mortgages! For more advice I recommend checking out this #3MINUTEMONEY video to get some great tips!

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