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What Mortgage Deals Are Available for You
In today's market its not so much a case of I when I get a mortgage approved but what sort of mortgage can I get, there have been a lot of changes in 2008, especially towards the end of 2008 and lenders have reduced the mortgage deals they have available and what sort of mortgage products they have available. We are not going to discuss a lenders standard variable rate as this is simply the standard rate of interest the lender will charge if no special deal is chosen.
100% Mortgages
In the early part of 2007 mortgage deals were widely available with practically all the main high street lenders offering 100% mortgage deals, especially to first time buyers. By the end of 2008 you would be hard pushed to find any 100% mortgage deals as mortgage criteria have tightened and more than ever mortgage affordability is a major concern for lenders, this is not necessarily a bad thing as getting a mortgage you can hardly afford doesn't help anyone, especially the borrower - having a mortgage you can not afford is probably one of the most stressful situations a person can be in, especially if the borrower has a family to care for also.
Fixed rate mortgage deals
Fixed rate mortgage deals have long been the favourite of anybody wanting to manage their money's better, because a fixed rate mortgages mean the monthly payments remain the same during the fixed rate period the mortgage payer knows exactly how much money they will have going out each month, regardless of what the interest rates are doing.
There is a risk of the borrower paying more than they need to if interest rates go down, but for most this is a small price to pay for the security of knowing exactly what their mortgage payments are going to be each month and its the only real downside to fixed rate mortgages - that being said, if mortgage rates rise above the fixed rate during the fixed rate period then the mortgage payer will be laughing all the way to the bank as the savings mount up - these reasons may be why fixed rate mortgage deals have actually increased during 2008.
Discounted mortgage deals
Discounted mortgage products simply mean that the borrower will get a set discount of the lenders standard variable rate, the discount could be 1 or 2% over a set period - these types of mortgages are best suited to the borrower who believes mortgage rates will decrease over the coming years which will mean they will benefit from lower monthly payments, however if the lenders standard variable rate increase so will the borrowers monthly payments.
Tracker Rate Mortgages
A tracker rate mortgage product tracks the Bank of England base rate, anybody with a Tracker Mortgage in November and December 2008 will benefit from the lowest interest rates since mortgages were introduced with the Bank of England base rate being an incredible 2%. A tracker mortgage will track the Bank of England base rate at something like 2 to 3% above the base rate - if a borrower had a crystal ball six or twelve months ago and could see this coming they would be sitting pretty at the moment as there is no sign of the rate increasing anytime soon.
There are other rates available but the ones listed above tend to be the main stream of what's available and what people actually want.
If you want to know what interest rate could be right for you simply contact us today and one of our brokers can speak to you in confidence and after discussing your circumstances, needs and preferences will be able to let you know exactly what will suite you best.
