What Is A Mortgage
Few people can afford to buy their home outright for cash. Most homeowners borrow the money from a Bank, Building Society or other mortgage company through a long-term loan called a mortgage.
A mortgage is a long-standing commitment, which is repaid over a period of years. The shortest period is normally ten years and the longest forty years.
In legal terms the lender takes what is called a ‘first charge’ on the property. This means that should you fail to meet the agreed monthly payments, the lender may repossess and sell the house.
Basically, all mortgages are a combination of two elements — the capital, which is the amount of money borrowed, and the interest that is the cost you have to pay for borrowing the said amount.
CHOOSING THE RIGHT MORTGAGE
At JD FINANCE, we have knowledge of a wide range of mortgages designed to suit your needs. The choice may seem daunting but your Personal Financial Adviser will give you all the help you will need in selecting the right type of mortgage.
The following are the main types of mortgage available:
Repayment Mortgage
With a repayment mortgage, you simply pay off the loan over a period of years with a single payment each month, made up of part of the actual loan and part of the interest on the loan. By the end of the term of the mortgage you will have paid off the whole loan and all of the interest. Unlike an endowment mortgage, a repayment mortgage does not include life assurance. A mortgage protection policy is therefore recommended to ensure that the mortgage is paid off should you or any person borrowing with you and included on the policy die before the end of the mortgage term.
Interest-Only Mortgage
If you know you are likely to be able to pay off the whole mortgage outright in a few years time, this could be a suitable option. An interest-only mortgage allows you to pay only the interest on the loan right until the time when you pay your mortgage back in full. At the end of the mortgage term the lender will expect full repayment of the mortgage amount, therefore you should carefully consider how you would repay the loan and the consequences of not being able to do so.
This option may suit someone who has investments, share options or a future inheritance that could be used to repay the loan at sometime in the future.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
J D Finance is a trading style of J D Finance Mortgages Ltd an Appointed Representative of Personal Touch Financial Services Ltd, which is authorised and regulated by the Financial Services Authority.
We normally do not charge a fee for Mortgage Advice, however a fee paying option is available. A typical fee is £299