choosing your mortgage

There are many factors to consider when choosing your mortgage.

Whilst it may not be the most exciting aspect of home ownership, a suitable mortgage should underpin any decision to purchase or improve a property and we have produced guides to help you make a more informed choice. If you have any questions simply ask your advisor.

The following should be read in conjunction with our mortgages explained page. We would advise that you read the mortgages explained page to help you understand mortgages. 

There are a number of different types of mortgages out there: Fixed, Variable, Discounted Variable, Standard Variable and Capped to name a few.

Fixed or tracker rate

Your choice will basically come down to your attitude to risk, your circumstances and whether you think that interest rates will rise or fall. If you expect them to rise you may wish to fix your mortgage interest rate. Alternatively if you expect interest rates to fall and stay low you may wish to opt for a tracker that follows the bank base rate. Consideration will also be given to whether you need to budget and know strictly what your monthly outgoings are.

Much has been said recently about trackers not following the reductions in the bank of England base rate. This is because they are trackers that are a discount on the lenders standard variable rate and if the lender does not change their standard variable rate then the rate you pay will not change. A tracker that "tracks" the bank of England base rate WILL fall when the BoE reduce their rates. 

How long will I be tied in for?

Most mortgage deals will have a 'tie-in' period. Therefore decide how long you might want to be 'tied in' for. Tie in periods are commonly 2, 3, 5 or 10 years. This again, may depend upon what you believe will happen with interest rates, as well as other factors such as when you might expect to next move house. It may be that you intend to sell the property in the near future and therefore don't wish to pay any penalties for doing so. Don't confuse the tie-in period with the term of the mortgage.

Rates and fees

Other things to consider, and r j f mortgages will help you with this, are the interest rates and any fees associated with the mortgage. These fees, charged by the lender, can be arrangement fees, valuation fees and early redemption fees. Other fee's may be legal fees and stamp duty, depending on the purchase price of your property. But there is one thing for sure; r j f mortgages will not charge you a fee.

Good advice

This is where a good advisor comes in. A good advisor will take into account not only your circumstances but your requirements and your preferences. A good advisor will also take into account the fees associated with a particular deal and work out the costs to you over the term of the mortgage deal, rather than immediately recommending the lowest interest rate. This is because the deal with the lowest interest rate may not necessarily be the cheapest or best deal over the term or even suit your circumstances. Therefore it is important the balance is right between the fees and interest rate.

Our recommendations cover not only interest rates, but also fees, flexibility, customer service and the lenders criteria. These are all areas that are not necessarily covered by price comparison websites or "best buy" tables.

A low interest rate does not necessarily mean a low cost mortgage as the fees associated with such a deal may be more expensive than one with a higher rate. This can be true of the opposite. A higher interest rate may come with lower fees. Our systems help us to look for the lowest cost overall should that be your want.

A good advisor will listen to your needs and search the whole of the market for the most suitable lowest cost mortgage to satisfy these needs.

For example, a first time buyer on a tight budget who is expecting their income to increase over the next couple of years may go for a fixed rate mortgage on a low rate and will not be concerned with regards to arrangement fees added to the loan.

Considering the above we generally find that the majority of our client's require the lowest cost option taking into account all charges. Our systems allow us to quickly source these for you.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. 

 r j f mortgages is an appointed representative of TenetLime ltd which is authorised and regulated by the financial services authority. Not all buy to let mortgages are regulated by the financial services authority. TenetLime Limited is entered on the FSA Register (www.fsa.gov.uk/register) under reference 311266

The information contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.