This article will briefly explain what an offset mortgage is and how an independent mortgage advisor can help you find the best offset mortgage.
Your main checking account and/or savings account are linked to your mortgage through an offset mortgage. Every day or month, the amount in these accounts is subtracted from the amount you still owe on your mortgage. This is done before the interest is added to the loan. When the money in your checking or savings account goes up, your mortgage payment goes down. If the money in your checking or savings account goes down, your mortgage payment goes up.
When looking for the best offset mortgage, it helps to get advice from a professional because there is more to a mortgage deal than meets the eye. Your mortgage is likely to be the biggest financial commitment you'll make in your life, so it's important to look at all of your options.
On the market, there are different kinds of offset mortgages. You could look at "best buy mortgage tables" to find the best offset mortgage, but they only give you basic information. It doesn't show you how flexible the mortgage is, like if you can underpay, skip payments, or overpay. It also doesn't show you what the fees and charges are. Fees for mortgages have gone up in the last few years. Fees can be more than GBP1,000, and some mortgage companies now charge fees as a percentage of the amount borrowed. For example, someone who borrows GBP120,000 on a new low fixed-rate deal for two years would pay GBP2,400 for a 2% fee. When fees are taken into account, the deal with the lowest interest rate may not be the best offset mortgage deal.
Recent research has shown that the top 10 largest mortgage lenders don't always have the best offset mortgage. Even though the top 10 mortgage lenders make up more than 60% of the mortgage market, they only offered 11% of the best 250 mortgage deals on the market. An independent mortgage broker knows everything there is to know about the mortgage market and will give you unbiased advice about the best offset mortgage. This will help you sort through the huge amount of information that is out there. The Financial Services Authority (FSA) fully authorises a mortgage broker, and they are qualified to give you advice.
Your mortgage broker will do a "factfind" to find out about you, your finances, and what you want and need. Your broker will look at your credit history, your credit score, and your ability to pay back the mortgage. Offset mortgages are usually based on affordability rather than a simple income multiplier. This means that people with irregular income, like those who are self-employed, may be able to get a larger mortgage than they could with a standard mortgage. All of the information you give your broker will help them find you the best offset mortgage on the market.
After your independent mortgage broker has found you the best offset mortgage, he or she will give you written information about the mortgage. This will include:
- How much money do you want?
- What kind of offset mortgage you want to get
- A description of the mortgage, including who is lending the money and the interest rate.
- Total cost of the loan, including fees
- How much more you would have to pay if interest rates went up.
- Your offset mortgage gives you a lot of options.
An independent mortgage adviser will answer any questions you have about the mortgage market and make sure you have all the information you need. You should talk to them because they can help you find the best offset mortgage. Resources
