If you are looking to buy a property in the UK, raise some capital from your existing arrangements, optimise your tax position from rental income, or are simply looking to restructure your existing monthly payments to make savings, then deVere Mortgages are now able to provide both UK residents and expatriates completely independent advice on all aspects of UK mortgages.
Whether you are buying your own home or an investment property, most people need a mortgage to do so. There are many mortgage loans available that it can be difficult to choose the right one for your circumstances. Your mortgage is likely to be your biggest outgoing and could potentially be with you for a long time. It is important that you gain all the information you need before making a decision.
deVere Mortgages have access to lenders who are happy to lend to UK nationals living and working overseas on standard rates even if their earnings are not in Sterling.
As well as tailored, independent advice we pride ourselves on our service to clients both at the advice stage and during the processing of their transaction. We have a dedicated team of administrators based in our UK office whose task it is to ensure the efficient and smooth processing of our clients applications.
Repaying your Mortgage
Capital & Interest (Repayment Mortgage)
This is the simplest type of mortgage. The monthly repayments you make to the lender every month pay off both the capital you have borrowed and the interest from the loan. Provided you keep up the payments, you are guaranteed to pay off the loan by the end of the term agreed.
The lender calculates your monthly repayments depending on the amount borrowed, how long for, the interest rate and how the rate you have chosen is set.
Interest Only Mortgages
An interest only mortgage is when the lender only charges you interest on a monthly bases on the loan you've agreed. You do not pay any of the capital you have borrowed back until the end of the mortgage. The lender will usually ask you on application of the mortgage, to provide an investment plan of some kind (such as a savings plan or endowment) to repay the loan at the end of the term. Many lenders also require some Mortgage Protection to be put in place to cover the loan.
Every month, you then pay this interest to the lender for the duration of the loan. The lender calculates your monthly repayments depending on how the rate you have chosen is set and at the end of the loan period, the lender will expect the initial capital they lent you to be repaid in full by whatever means you have arranged.
The primary misconception regarding interest only mortgages is that they are called 'endowment mortgages' or 'pension mortgages'. However, strictly speaking, these names describe an interest only mortgage plus the method of repayment for the capital sum. Simply put, an endowment mortgage is an interest only loan where the capital at the end of the term is repaid by the proceeds of an endowment policy or lump sum from a personal pension that is running alongside the interest only mortgage.
Flexible Mortgage/Offset Mortgages
The flexible mortgage is a relatively new type of mortgage available particularly in the UK. It was conceived and has been used in Australia for many years and was originally called the ‘Australian’ mortgage. However, due to its features it is becoming more popular for borrowers in the UK and around the world.
A flexible mortgage is very popular with Higher and Additional Rate Taxpayers, Fixed contract Workers and self employed workers. The reason is that a flexible mortgage has the facility for both over and underpayments built into the loan. What this means is you can overpay your mortgage when finances allow (pay rise, bonus, an inheritance etc.), and then, providing you have made overpayments in the past, underpay when finances are tight (job loss, change in circumstance etc).
Some flexible mortgages have an offset feature to them allowing the borrower to offset their savings against the mortgage balance therefore reducing the mortgage repayments. A savings and/or current account are linked to the mortgage account which means that your savings and mortgage are in one place, working in tandem together.
Fixed Rate Mortgages
A fixed rate mortgage allows the borrower to budget on a monthly basis for a fixed period of time. You can fix your interest rate from as shorter term as 2 years to a longer term of 25 years. This means that as variable interest rates rise, your mortgage rate will stay the same for the period you have fixed it for.
Variable Rate Mortgages
A fixed rate mortgage allows the borrower to budget on a monthly basis for a fixed period of time. You can fix your interest rate from as short a term as 2 years to a longer term of 25 years. This means that as variable interest rates rise, your mortgage rate will stay the same for the period you have fixed it for.
Tracker Rate Mortgages
A type of variable rate, this is an interest rate that tracks the Bank of England Base rate. If the Bank of England rate reduces, your mortgage payment will do so as well.
Capped Rate Mortgages
Capped rate mortgage options help you to budget. Interest rates on a capped rate mortgage can move up and down with the market but will never exceed a specified top level - ‘the cap.’