Step
1 Find the perfect House.
Using the internet for selecting can save you hours of
trekking up and down the country. Tip, if you go
through a Virtual agent there is a good chance you will
save on the "Real Estate Agents Commission"
House
Web - Buying and Selling
guides etc
Did you know that over 5% of homeowners sell their property without an estate agent?
Selling your home using the Internet is now as effective as using an estate agent, with one major difference... You don't pay the agent's commission.
That's a typical saving of over £4,000.
For a limited period we're giving away HouseWeb's 21-page "Guide to Selling Your Home", which includes: Click here for your
free copy
Option 1 Cash?
Good for you - go for it - there is hardly any
other investment that is as 'safe-as-houses'.
Option 2 Mortgage? OK - what type? - Endowment? - Go to an
insurance company or a mortgage broker tied into insurance
companies. Straight repayment? then you need to decide on
Flexible or Level term; Fixed rate or variable rate
interest. You may also weigh up whether to mortgage via a
Bank, Building Society, or just go to an intermediary.
Need help: see hints and suggestions below
Survey
Hint: Save on the Structural Survey. 40% of
homebuyers spend hundreds of pounds on a Structural Survey
which tells you every dimension of the
property and what it is made of. However,
The lender simply needs to verify the
property is a safe investment ie can they
recover the loan if you default on payments:
A Valuation Survey, typically £100, will
satisfy this need as well as identify any
repair work considered appropriate.
Level Term
You agree at the outset the length of term, typically 25
years
Fixed Rate
(Beware penalty clauses)
Bank
Building Society
Variable Rate
Bank
Building Society
Flexible Term (Beware lousy rates in return for facilities offered)
The lender allows variable repayment amounts and/or
dates
Fixed Rate
(Beware penalty clauses)
Bank
Building Society
Variable Rate
Bank
Building Society
Endowment
Mortgage
You buy an insurance policy which you hope
will pay off the loan at the end of the term. (You
only pay interest during the term).
The risk is if the endowment doesn't grow
sufficiently to cover the debt...
Insurance Company
Tied agent, eg Bank, Building Society
Money Saving
Tips on Repayment Mortgages
Maximize
your savings interest: If you take a
straight fixed- or variable-rate mortgage, agree on a
minimum repayment schedule through the year and set up a
savings account whereby YOU can benefit from the
interest. Then pay off any extra to reduce the capital
outstanding at
the END of the lenders financial year, eg 30 September.
Then when the interest is calculated on the first day of
the new year (1 October in this example) the amount
outstanding is lower than if you had merely paid the
agreed repayments, yet you get to profit from the
savings interest otherwise denied you.
An alternative to this arrangement is if you can
afford to pay off more than the agreed repayment from
time to time, consider a flexible mortgage, whereby the
amount outstanding is directly reduced, saving interest
payments and reducing the term.
Beware of Early Redemption Penalty clause
(also known as
Ceiling Fees) in the event of
wishing to pay off a loan early - The cheap rate offered may turn
out to be not-so-cheap in total. This would also apply when
Switching to another lender (Re-mortgaging).
Beware
of Lock-in clauses applied to Discounted and
fixed-rate mortgages and can be as long as 7 years.
The effect of the lock-in is that when interest
rates fall, you are locked-in to the interest scheme
you have bought into, unless you are willing to pay
the Early Redemption fee.
Beware of Lenders
who wish to charge a Mortgage Indemnity
Guarantee on loans of over 75% -90% - this protects the lender at
your cost!
and C&G have abolished this.
