Searching for the ideal mortgage can be a daunting experience. As an independent broker our service is impartial helping you find the perfect mortgage that suits your needs
If you have a repayment mortgage (also known as a capital and interest mortgage) the mortgage balance will reduce over the term of the mortgage until it is repaid in full at the end of the mortgage terms.
With an interest only mortgage you will need a repayment vehicle to make sure the mortgage can be redeemed at the end of the term. Some common repayment strategies are:
This page explains how you can pay off your mortgage faster by investing rather than making overpayments on your mortgage
How to Pay Off Your Mortgage Faster
In our opinion, a better way to repay your mortgage early is to invest instead of making overpayments. Over the period of an average mortgage term, even a low risk investment should return a healthy gain that would be higher than the interest rate of the mortgage. With mortgage interest rates as low as 2% and a low risk investment realistically returning an average between 3.5% - 7.5% per year, making overpayments on the mortgage doesn’t give the same return as the investment should.
Another factor to consider is that if you invest, in an emergency you would have access to the sum of money you had built up investing, whereas if you make overpayments, that money is locked away as equity in your home and is not easily accessible.
Should You Pay Off Your Mortgage or Invest?
If you are unsure whether you should make overpayment on your mortgage or Invest, our advice is most likely to invest. You should speak to one of our independent financial advisers before making a decision and to make sure you invest in a suitable fund that matches your attitude to risk.
DWM Mortgages via Lifetime Wealth can provide independent investment advice and manage your investments to achieve your financial goal of repaying your mortgage early.
Capital is at risk with all investments and investments can go up and down in value.
An Agreement in Principle, also known as a 'Decision in Principle' or 'Mortgage Promise', is useful if you haven’t found a property you want to buy but would like to know how much you could borrow.
All we need is a few personal details about you and anyone else who will be named on the mortgage. Then we’ll contact a credit reference agency for a credit search and give you a credit score. If you reach our pass mark, we’ll give you a certificate that you can use to show a seller you can get a loan.
A mortgage offer is issued by a lender once your application has been received and necessary checks, such as a valuation and confirmation of your details, have been carried out. It sets out the terms under which the lender is prepared to offer you a loan.
Methods of repayment - there are three different ways of repaying your mortgage. These are repayment, interest-only, and a combination of repayment and interest-only.
Mortgage terms - mortgage terms of up to 40 years are available. How long the mortgage lasts will affect your monthly payments and the total cost of the mortgage.
With a repayment mortgage, the longer the term, the lower the monthly payment. However, it will take you longer to pay off the loan so you will pay more interest. This means it will cost you more over the life of your mortgage.
With an interest-only mortgage, the length of the term makes no difference to the monthly payments because these are only paying off the interest charges and not the loan itself.
With an interest-only mortgage your mortgage term needs to match the time when you will have enough money in your repayment plan(s) to repay the loan.
Mortgage products - we may have different types of mortgage products with different types of interest rates. These change from time to time and we'll give you details of the current range when you apply.
Depending on the mortgage product you chose, you may have to pay an early repayment charge if you repay all or part of your mortgage early or we agree you can change products.
Product incentives - from time to time we may offer mortgage products that include an incentive. The interest rate for products with incentives may sometimes be slightly higher than for products without incentives.
So you will need to consider whether the incentive available at the start of the mortgage is more important to you than the slightly lower interest rate you may get during the product rate period without the incentive.
Your mortgage adviser will ask you about your preferences and discuss your needs and circumstances before deciding which mortgage to recommend to you.
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