Are you a first-time buyer who’s never had to worry about getting a mortgage before? If so, you might be feeling a little confused about what’s on offer out there. Let’s strip it all back and start from the basics.
What Does LTV Mean?
LTV stand for loan to value. The LTV will have a percentage number after it. This is the percentage of money you can borrow of how much the home is valued at. So, if the mortgage you are interested in has an 80% LTV it means you need to put down at least a 20% deposit otherwise you won’t be able to secure that mortgage. However, if you are looking for a high-value mortgage and you have an intricate state of affairs you can try companies such as Enness Private Clients that work to help overcome complex situations.
What’s The Difference Between Fixed Rate And Variable Rate?
When you are securing a mortgage, you will have the option of a fixed rate and a variable rate. You can choose which one you want to take out. A fixed rate mortgage means that the monthly repayments you make will not change for the period of time you take the fixed rate for. This can be two, three or even four years before you then renegotiate the payments. This works well for people who are budgeting and like to know exactly what they will be paying for a set number of years. A variable rate mortgage may change monthly as interest rates fluctuate or decline. If they rise, you will be paying more, but if they decline you will pay less. A variable tracker mortgage follows the base rate set by the Bank of England and standard variable rate is set by the mortgage lender. Variable rate mortgages offer the chance of paying less if interest rates fall. It’s best to only choose this mortgage if you are on a comfortable income.
Interest-Only Vs Repayment
This pretty much does what it says on the tin. An interest-only mortgage means you will only be paying back the interest you owe the lender each month. You won’t be paying into any of the capital you have been loaned. A repayment mortgage means you pay back interest each month as well as some of the capital you have borrowed. This means that by the time your mortgage has come to an end, you will have paid back a bulk of what you owe. Most mortgages last for 25 years. With an interest-only mortgage, you will have a large sum to pay at the end. These types of mortgage are not used by many lenders anymore. However, you can choose to apply for longer or shorter mortgages. The longer your mortgage, the more interest you will end up paying.
What Is ERC
ERC stands for Early Repayment Charge. If you are on a fixed rate or discounted mortgage and you find you come into a large sum of money, you may want to pay a bulk of your mortgage off early. For this, you will incur a charge. You will need to check your mortgage offer to see what the ERC charge will be.
Career As A Mortgage Advisor
If you found this interesting, you maybe interested to hear a Mortgage Advisor earns £22,000 to £70,000 average per year. Requirement would be confidence in working with numbers, IT skulld, excellent customer service skills plus the drive and motivation to meet targets. You can get further information from www.simplyacademy.com, on the finanicla courses you can take.