Mortgage help in Barnstaple and North Devon

Eclipse Financial Solutions can help you with your mortgage

Mortgage borrowing will probably be the largest financial transaction you are likely to make. It is therefore essential to seek mortgage advice from an independent source to tailor make it to be specific to your needs and requirements.

The industry has continually evolved and the days where clients have one mortgage lender for the life of the loan have disappeared. The market today is immense and lenders are in competition with each other for an increasing client base. They are therefore willing to offer different incentives to encourage clients to shop around. The added issues are the different products available, some offering low headline interest rates, but when taking into account the booking and arrangement fees, compulsory insurances, mortgage indemnity premiums and early repayment penalties, the initial rate disclosed may not be the best choice.

Along with all this choice is the added confusion of different borrowing options.

Repayment Mortgage (Capital and Repayment)

With this method, you borrow funds over a specific term, basically, the borrowers monthly payments contribute to the interest charged and the capital borrowed on a monthly basis to the lender. The primary benefit of this method of borrowing is the certainty that as long as the payments are maintained, the loan will be repaid in full. Borrowers must be aware that only a small amount of capital is paid off in the early years.

Interest Only Mortgage

With this method, the monthly payment only represents the interest levied on the amount borrowed to the lender and therefore does not reduce the loan size. The borrower may subsequently consider an arrangement, which will produce enough capital to redeem the loan. Therefore, there is some flexibility as to what investment vehicle is used to repay the borrowing which may also produce some tax advantages. However, unlike the Repayment Mortgage option, there is no guarantee the investments chosen will offer enough capital to pay off the loan at the end of the term.

Different types of investments that can commonly be used in connection with mortgages are: - Endowment, Pension, Inherited Wealth and Individual Savings Plans ISAs. Please note that you must check with your Independent Adviser as not all lenders are prepared to accept these vehicles as methods of repayment. With all of the above methods of repaying your mortgage, it is strongly advised that regular reviews are carried out with your Independent Financial Adviser to offer you peace of mind that you will be able to repay off your loan.

Your home may be repossessed if you do not keep up the repayments on your mortgage.