A mortgage is just a special kind of loan that banks and building societies give to people who meet the requirements so they can buy a house. Since there are so many mortgages to choose from, it's important to compare them before making a final decision. There are probably other ways to borrow money to buy a house, but mortgages are the easiest and most common way.
If you want to buy a house, you probably also need to think about getting a mortgage. Sometimes the different offers can be hard to understand and cause confusion. Because of these things, you need to compare mortgages carefully.
You can get a 100% mortgage, which means that you will get a loan for the full amount of money you need and won't have to come up with a deposit. This may seem good at first, but the lender is likely to charge you a lot more for their services. This makes this type of mortgage less good than it may seem at first.
Today, you can even get mortgages that are 120 percent or even higher, giving you more money than you need for the actual purchase. But think about this: the value of your house will be less than the amount you owe on your mortgage. This is not a good way to borrow money because the only thing you have to put up as security is your house. What will you do with the extra 20% if everything goes wrong?
When you compare mortgages, the interest rate is probably the most important thing to think about. This is how much you will have to pay back on top of the amount you borrowed. Your main choice will be between a mortgage that you pay back and one that you only pay interest on. This means that you will either only have to pay back the interest on the money you borrowed, or you will have to pay back some of the money you borrowed plus the interest. Of course, even with an interest-only mortgage, you will still have to pay back the principal at some point.
There are many kinds of mortgages to think about. There are mortgages for first-time buyers, self-certification mortgages, buy-to-let mortgages, capped mortgages, discount mortgages, fixed-rate mortgages, and more. Some of these are easy to understand, but others might be hard to understand for someone who doesn't know much about mortgages.
The first-time buyer mortgage is obviously for people who are buying their first home. This mortgage is easy to get because it takes into account the problems that first-time buyers face. For instance, people in this situation are probably young and haven't been working for a long time. They likely don't have much money saved up either. Instead of being unfair to people in this situation, these mortgages make it easy to apply for and get.
A mortgage is probably the most money you will ever have to borrow. Because of this, it is very important to compare mortgages carefully to find the one that fits your needs and your ability to pay back the loan.
