Mortgages
Credit Jungle knows that finding the best mortgage or remortgage for you and your circumstances can be difficult.
Do you want to borrow money over a short period or more than 25 years?
Do you want a repayment or an interest only mortgage?
Do you have a large deposit or do you need to fund most of the property purchase price?
At Credit Jungle we understand your dilemma, CeeJay and his friends are here to help!
Your Credit Jungle Rating will be used to provide details of borrowing opportunities for you.
Your Credit Jungle Rating will be matched with lenders that will provide a mortgage at a competitive rate over the time period you want!
Complete your mortgage application NOW and let CeeJay help you to find the best mortgage package for you.
What exactly is a Mortgage?
A mortgage is a loan you take out from a mortgage lender to help pay for a property.
If you don't repay the loan as agreed, the lender can take possession of the property and sell it to recoup the money you owe.
The loan is made up of two elements:
- The capital – in other words, the amount of money you borrowed to buy your property, and
- The interest– the amount the mortgage lender charges for lending you the money (which is why they're in business).
There are a number of different mortgages available, some are explained below:
Repayment Mortgages (aka Capital and Interest Mortgages)
This is the old fashioned, traditional type of mortgage and remains the only way the property is actually guaranteed to be yours at the end of the mortgage term, provided you have repaid the loan.
Your mortgage debt is divided into capital repayments (i.e. repayment of the money you borrowed) and interest payments (i.e. repayment of the interest you're being charged for the loan).
As you pay off your mortgage every month you're paying off a bit of capital and a bit of interest until the full debt is repaid.
You usually pay off mostly interest in the early years and then gradually more of the capital debt. It may seem as if this is costing more but that's because unlike the other types of mortgages you're paying off the capital and not just the interest.
Interest-only Mortgages
Interest-only mortgages work on a very simple principle: you borrow a sum (known as the capital) from your mortgage lender and each month you repay only the interest due on this debt.
Because you are not repaying any capital, as you would with a standard repayment mortgage, the monthly payments are considerably lower than they would otherwise be.
However, at the end of your mortgage term (typically 25 years, but it could be longer or shorter) you still owe the capital sum.
Offset Mortgages
An offset mortgage works by counting the money you have (in current or savings accounts) against the money you don't (your mortgage) to reduce what you owe.
You earn no interest on your cash and can get it back any time you want, but and here's the good bit... you don't pay any interest on the equivalent amount of mortgage debt.
What are the benefits of offsetting?
You are likely to be paying out far more interest on your debt than you earn on your cash balances.
So by offsetting, you're cutting your monthly interest bill.
You can reduce your monthly repayment accordingly. Mortgage lenders call this paying net and it can be an attractive option if you're short of cash.
You can also pay what it would have been before your cash balances were taken into account. Lenders call this paying gross and it's an even better option if you can afford it.
This is because paying gross means you're actually overpaying, and this in turn means you will clear your debt more quickly, saving even more interest in the process.
Fixed Rate Mortgages
This type of mortgage is where you and the mortgage lender agree to fix the interest rate owed on your loan for a set period of time.
The period of time is usually between 1 and 5 years but could be longer. (That simply depends on the exact mortgage deal you choose).
After the agreed period, the interest rate owed on your loan usually reverts to the lender's variable rate.
Advantages: You know exactly what you'll owe.
Disadvantages: If interest rates drop you may be paying more than you might have done if you'd gone for the variable rate.. But interest rates might rise... At least you're not gambling with your home...
If you want to leave before the agreed term the early repayment charge is usually significant. For example you may be charged six months gross interest if you leave a five-year fixed rate agreement.
Always read the small print and ask as many questions as you feel like.
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Your home may be repossessed if you do not keep up repayments on your mortgage.
The mortgage section of this website has been approved by Advance Mortgage Funding Limited trading as Pink Home Loans for the purposes of section 21 of the Financial Services and Markets Act 2000
