From a cursory survey of websites and brochures, you’ll see a myriad of different types of mortgage. The mortgages explored so far are a basic overview – you’ll find any amount of types – some combining several features and with additional incentives to entice you.
Basically, if you can imagine a mortgage, it probably exists. So, after doing your homework and boning up on mortgage terminology, how do you finally choose? Which deal is the best on the market today?
The truth is that there is no one-size-fits-all super mortgage that will be a perfect fit for everyone’s financial situation. What you need to do when choosing a mortgage is work out exactly what would suit you – and this will depend on your individual circumstances. Once you have an idea of what you’re looking for, you can let the lenders and brokers find the mortgage to fit.
Below are some examples of possible life situations, with ideas for mortgages that may be appropriate:
Young, single, and likely to be forever short of cash! It’s doubtful you’ll be able to find a large lump sum for a mortgage, and your income probably comes from part time jobs – hardly an enticing prospect for a lender. Your best bet is to approach family for help – a loan for the place and/or a guarantor mortgage (combined with proof of your responsible attitude) could help you get an early foothold on the character ladder.
You’re paving the way to a successful career, and perhaps thinking of moving in with a partner. However, your salary is probably comparatively modest, and you may not have much money saved. Ask lenders for their first time buyer deals, including 100% mortgages, and consider a joint mortgage with a partner to raise your buying strength. Cashback may be useful for covering the costs of fees and buying furniture. Those willing to take a bit of a risk could consider an interest only mortgage combined with savings and investments.
Perhaps you have a family or dependents now, and your career is fairly solidly established. You may want to make the most of your money by looking at flexible mortgages, or one that can be offset against your other accounts. Keep in mind your home may have accrued equity by now, which could be released by revaluing your home, and perhaps switching mortgage. If you run your own business and have some capital to invest, you might want to try a self-cert mortgage.