How to Get the Most Out of your Mortgage

How to Get the Most Out of your Mortgage

With perhaps the exception of the fabulously wealthy, we all need to take out a mortgage when buying real estate, and with so many types of mortgage available, it can be a little daunting to wade through the terms and conditions, looking for anything that might be important. If you are somewhat confused about which mortgage is right for you, here is some helpful information which should make things a little clearer.

Long Term Mortgages

It is normal for a young couple to take on a 30 year mortgage, but if the thought of spending half your working life repaying the, you might want to consider a 20-year mortgage, which focuses more on the paying off the principle, and it will mean higher monthly payments. There are reputable online mortgage brokers and by talking to one and explaining your situation, they can usually secure a loan that is in line with your budget and requirements.

Flexibility

Some mortgages are high on flexibility and with an uncertain future, it is smart to keep your options open. Some people anticipate higher earnings and therefore need a mortgage where they can up the monthly payments at will. The best thing to do is talk to an independent financial adviser, who will be able to recommend the right type of mortgage, and with his extensive connections, he would be able to source the best rates.

Re-mortgaging

As things have a habit of never remaining the same for long, some homeowners decide to refinance their house purchase, while others wish to release some of their equity, rather than waiting until they sell the property, and there are online brokers who can facilitate such a request, should a person wish to make changes.

Professional Advice

The world of real estate finance is indeed complex, and with so many types of mortgages available, it makes sense to approach an expert before making any commitments. Interest rates fluctuate, and at the time you took out your mortgage, they might not have been as favourable as they are now, and sometimes it makes perfect sense to re-mortgage. Any professional mortgage broker would be only too happy to arrange something that perfectly suits the client’s needs, and by informing them of your status and expectations, they can usually come up with something favourable.

Insurance

As you would expect, a mortgage lender will want insurance cover that protects the loan in the event of the customer’s death, sickness or injury, and many mortgages have a life insurance policy built in, and this ensures that the loan is settled in case of death or disability. While life insurance might be compulsory, there is additional protection one can take out to cover redundancy or a sudden loss of earnings, should a person require it, and any broker can facilitate this.

Downsizing

Some homeowners decide to downsize when the family has grown up and left home to start their own families, and this can result in much lower repayments, and in some cases, the equity is sufficient to pay off the mortgage early. Equity release is becoming more popular, as semi-retired couples wish to take advantage of their equity while they are still able to travel and enjoy life, and there are several packages available that enable a homeowner to use some of the equity that lies in their property. A lifelong mortgage is one way of achieving this, and there is adequate protection to ensure you never lose your home.

Getting the most out of your mortgage means knowing your requirements and then finding the right lender who will offer a suitable package that is tailored to the client.