Mortgages can be really complex, especially for first time home buyers. Knowing what kind of mortgage you have and how you get it plus the importance of good sound financial advice go a long way in helping you make right decisions. This article is going to help you learn about mortgage advice essentials, why getting professional advice helpful to you in buying your home.
1. What is Mortgage Advice?
Mortgage advice is guidance that financial experts have to help you and any business acquire a mortgage. It means assessment of various mortgage products, insight into interest rates, and your financial status to select the best possible mortgage for your use.
2. Why is Mortgage Advice Important?
A. Customized Solutions
Every financial condition is unique. Mortgage advisers have the time to comprehend your particular needs, tastes, and financial capacity. They can recommend mortgage products suited to your situation when you are a first time buyer, looking to re-finance, or to invest in a rental property.
B. Range of Products Available
Mortgage advisors have different lenders and mortgage products to select from, and this might not be as easily available if you do it yourself. This comprises special deals or promotions offered only to advisors. Therefore, you can expand your options and get the best rates by hiring a professional.
C. Dealing with Complex Terms
Mortgages have some terms and conditions that most people find very confusing. A mortgage advisor can take the confusion out of most complex terminology and explain other implications of different mortgage features, such as fixed verses variable rates, repayment periods, and penalties for making an early repayment.
3. Different Types of Mortgages
When you are looking to seek mortgage advice, first and foremost, you ought to know the different kinds of mortgages available:
A. Fixed-Rate Mortgage
These are fixed-rate mortgages, meaning that the interest rates for the entire duration of a loan are maintained constant, and therefore the monthly payment will be consistent, easy on the budget.
B. Adjustable-Rate Mortgages
Adjustable-rate mortgage has an interest rate fluctuated. Although it may become lower than the fixed interest rate at first, a possibility exists that it increases during the month, meaning that the monthly payments could be unstable and dangerous, especially when rates are increased.
C. Interest-Only Mortgages
In this kind of mortgage, you pay only the interest for a given period. The initial payments are low, but you have to plan for the eventual repayment of the capital.
D. Buy-to-Let Mortgages
These are meant for purchasing rental properties. It is important for prospective investors to understand the unique conditions and regulations of buy-to-let mortgages.
