Repayments How does it work?
You borrow a lump sum over a fixed period of time (usually 25 years but can be shorter or longer). You pay the interest and some of the capital on a monthly basis to the lender.
ADVANTAGES: Some flexibility with repayments, such as making overpayments (more than the normal amount) and under some circumstances taking a payment holiday, making underpayments (less than the normal amount) or borrowing back previous overpayments. The only way you can be 100% certain the loan will be repaid, providing repayments are maintained. DISADVANTAGES: Monthly mortgage payments may be higher than interest only mortgages covered by an investment/life assurance product to repay the capital. Only a small amount of capital is paid off in the early years as the monthly mortgage payment consists of a higher proportion of interest to capital repayment.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
For mortgage business there may be a broker fee payable. The precise amount will depend on your circumstances but typically will be up to 2% of the loan amount payable on completion. There is no initial consultation fee payable.