Mortgages – the basics
The subject of mortgages is a difficult one. A lot of people don’t fully understand them or what is required of them by the lender. We sat down with independent financial advisors TMP Sherwins to try and help.
So, what is a mortgage? A mortgage is a loan taken out over a period of time (most commonly 25 years) to buy a property or land. You can apply for a mortgage directly from a bank or building society, but keep in mind not all banks offer mortgages on shared ownership. The best thing to do is speak to an independent financial advisor, like TMP Sherwins. They will compare the different mortgages available on the market and help you decide which one is best for you.
How does a mortgage work? The loan you take out from the bank or building society is called capital, and the lender then charges you interest on this capital until it is repaid.
In order to secure the loan you will need to pay a deposit. A deposit is a sum of money that goes towards the cost of the property. The more deposit you have, the lower your interest rate could be.
Before approving a mortgage the lender will ask a range of questions. We will discuss what the lenders want to know in more detail next week.