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Introduction to mortgages


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The world of mortgages can seem quite daunting, with numerous different lenders, hundreds of mortgage products to choose from and sometimes unfamiliar terms and concepts. With Maxwell Moore, you don't need to become an expert because we will get to know about you and your circumstances in order to expertly recommend a suitable mortgage for you. However, we want you to understand your options so we've put together the following guide to some common mortgage themes.

One very important thing to remember is that a mortgage will be secured against your home. This means that if you fail to make the payments on your mortgage, the lender can apply to take possession of your home and sell it in order to repay the money that you owe.

If you are ever concerned about being able to make your mortgage payments please contact us at the earliest opportunity so that we can support and advise you.

Use the menu at the top to learn more about mortgages for specific purposes!

 

What is a mortgage?

The term mortgage generally refers to money that a financial company, such as a bank or building society, lends to a person in order to buy a property. Today, a mortgage is created by a lender taking a legal charge over the title to the property in question using a deed expressed to be by way of legal mortgage.

Obtaining a mortgage

The following steps are generally involved in obtaining an offer of mortgage.

Common mortgage terminology

Rates

Rates can be classified as variable or fixed.
Variable rates can be further divided into tracker or discount and may have a cap and/or a collar.
Variable rates, and sometimes fixed rates, are often linked to an underlying base rate.

Choosing the right mortgage isn't as straightforward as going for the lowest rate. The type of rate is a very important consideration.

Repayment methods

There are two common ways of repaying a mortgage.

It may be possible to arrange your mortgage with part on repayment and part on interest only.

Valuations

There are three common levels of valuation. A lender will require a basic valuation but the borrower can request one of the more detailed reports. The lender will instruct the valuation but will generally charge the borrower the fee for it.

You can read more about valuations and surveys on the RICS website.
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