Types of Mortgage
The Different Kinds Of Mortgages
There are many different kinds of mortgages and not knowing what they are could cost you money and affect how much you can borrow; both now and in the future. Some lenders may offer certain mortgages and another may offer different ones, so it's important to understand what you are signing up for to ensure that you get the best deal.
Want to know the different kinds of mortgages? Then this article has got the information you need.
What are the mortgage types?
Altogether there are 14 kinds of mortgages - and this a lot! They all do different things and can benefit you in different ways, and that's why you should pay attention to what they are and what they do. The types of mortgages are:
· repayment mortgages
· fixed rate mortgages
· variable rate mortgages
· interest only mortgages
· 95% and 100% mortgages
· flexible mortgages
· first time buyer mortgages
· discounted rate mortgages
· capped rate mortgages
· adjustable rate mortgages
· tracker mortgages
· cashback mortgages
· offset mortgages
· buy-to-let mortgages
As you can see not all of them are self-explanatory, so knowing exactly what’s what can make a huge difference to both your chances of approval and your finances well into the future.
Why can they benefit some people and not others?
It all depends on what you want. You may want a mortgage with a set interest rate, whereas others may want a mortgage that allows them to pay the interest at a later time all at once. Some are made to suit certain situations that you may find yourself in, but a person in a different situation to you won't have those kinds of needs.
It may be complicated and long-winded, but it's better that there are so many different types of mortgages, because you're likely to find one that suits you the best.
Which one should I get?
If you know what they are and what they do, and are still unsure as to which one will be best for you, a repayment mortgage may well be the way to go.
They are the standard kind of mortgage that you'll probably find from every lender you speak to, but that doesn't mean they're not good. They have no special requirements or bonuses; they're just easy and simple to understand.
You repay some of the owed money each month (plus interest) and by the end of the mortgage (which is usually 25 or 30 years) you'll have paid off all the money. It's far less complex than some of the other types of mortgages on offer.