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Mortgage Product Information Libraries

Welcome to Mortgage Product Information Libraries which contains further information and FAQ's on Mortgage Product money matters and financial product and key facts about all products featured on www.whichwaytopay.com.

        

Information Libraries

Getting on the property ladder is tricky and often means getting a hefty mortgage. Dealing with mortgage providers or brokers can often be an overwhelming experience so it is important to understand the product before you make the first step. A mortgage is a sum of money that you can borrow from a bank or building society for the purpose of buying a property. You then pay back the money to the lender over an agreed period of time in addition to accrued interest. There are various mortgage products that you can take out so it is important to research all the products available on the market. The important question to ask yourself is how do you research the different types of mortgages out there and decide which one is best for you? Below we will discuss two of the main mortgage types that you should be familiar with 'repayment' and 'interest only' mortgages.

Before we look at these different mortgage types, we will briefly look at how to prepare yourself for your mortgage application and ensure your documents are all in order. Firstly, you must ensure you are on the electoral roll at your current residence. In addition, if you have never had a credit card it would be worth taking out a credit card and using it sensibly, ensuring you pay it off in full every month. These tactics will both help you increase your credit score which will, in turn, ensure you get the best chance possible to obtain mortgage approval. Lenders will also want to see your complete address history for the past three years, your last P60 or three years of accounts if you are self-employed, the last three months of bank statements and finally the full details of any loans or credit cards you might have. If you have this information to hand then this will speed up the process enormously.

Let's take a look at repayment mortgages - with a repayment mortgage your monthly repayments include the repayment of the capital amount you have borrowed in addition to the accrued interest. When you receive you mortgage statement, you will be able to view how much you have paid off your mortgage, and the satisfying part is the outstanding balance will decrease throughout the term. The great thing about repayment mortgages is at the end of the term, you know that the total amount of debt has been repaid. Overpayments and lump sum payments into your mortgage account can be made, however, watch out for any financial penalties.

With an 'interest only' type of mortgage, each mortgage payment is only used to pay off the interest. As a consequence, if you have not got the capital to pay off the mortgage at the end of the term you run the risk of losing your property. It is important to ensure you have a plan in place so you are able to repay the mortgage sum.

For most people, taking out a mortgage is the biggest loan that you will ever take out. For this reason it is important to ensure you chose the right product for you. Comparison sites can help you with this decision, however, if you are in any doubt you should seek independent financial advise from someone that knows every product on the market.

        


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