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The Mortgage Term is quite simply the length of time it will take you to pay-off your mortgage! One of the facets you'll have to consider when entering into a mortgage transaction is the length of your mortgage.
Here we explain and take a look at the Mortgage Term, and discuss both the shorter mortgage term as well as the longer term mortgage and discuss reasons as to why its probably best to make your mortgage term as short as possible. We also discuss how we can help you with a Mortgage product that would enable you to make overpayments on your mortgage.
Table of Contents:
So what is the Mortgage Term exactly? Well, quite simply the Mortgage Term is the length of your mortgage, i.e. the length of time it will take you to pay-off your mortgage!
When arranging a mortgage, one of the many important things you will have to consider is the length of your mortgage. Traditionally, most borrowers select a 25-year period for their mortgage length.
The mortgage term is probably one of the least researched components when it comes to choosing a mortgage, but in reality, it's just as important as the interest rate - possibly even more so! Afterall your mortgage term will determine how much you will ultimately repay.
You know the drill: the longer the term of the mortgage, the smaller your monthly repayments, but the greater the interest charged. And conversely, the shorter the term of the mortgage, the higher your monthly repayments, but you'll pay much lower interest charges.
However, it's not quite as simple as that. Hard-pressed first-time home buyers are finding it increasingly difficult to get onto the first rung of the property ladder, and so lenders are stretching mortgage terms from the traditional 25-years, to 40 or even 45-years in order to improve affordability for these young buyers!
There is no doubt that a long mortgage term can be risky, especially where the term may project into retirement, and of course your income is likely to drop considerably when you are retired. It's also worth bearing in mind that by extending your mortgage term from 25 to 40 years, it's likely to cost you twice as much!
There are probably two schools of thought here:
There are of course, substantial merits in both philosophies. And for once, perhaps you can have your cake and eat it! How? With a Flexible Mortgage product.
Flexible Mortgages are nowadays widely accessible in the marketplace, and each has their own range of features and benefits. However, all flexible mortgage products will
It's widely accepted that you should make your mortgage term as short as possible, and that's because:
Yes! No problem
Remember, our qualified mortgage advisors are available to discuss the options open to you. Naturally, we'll carefully assess your circumstances, needs, requirements and aspirations and come up with the most appropriate solution for you.
We think it's also a good idea to review your mortgage arrangements regularly. By doing so, you may well be in a position to switch your mortgage to take advantage of better interest rates, or special preferential rates for a certain time period, for example a discount or fixed rate - but always keeping that degree of flexibility built in to make overpayments, even during the preferential rate period.
However, we feel that it's equally important not to overstretch your finances by committing yourself to an unrealistically high monthly payment that you simply can't afford, and that could potentially put you in the position of falling behind with your mortgage payments!
So, why not have a chat with one of our mortgage experts here at Shire Direct. We feel certain that you will find our service to be friendly, professional and helpful without the air of stuffiness that you may bump into elsewhere. Please don't hesitate to contact us if you would like to discuss your requirements, naturally without obligation! Our mortgage advisors are available up until 10.00pm everyday including weekends on Freephone 08000 282 281, or alternatively you can always enquire online, its quick and easy to do! We'll be delighted to provide you with an in-principle decision - whatever your requirements.
We hope we've managed to shed some light on the mortgage term and how we can assist you. Remember, we're only ever a free telephone call or few mouse clicks away, and would love to hear from you!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
Remember, we're here to help, and would love to hear from you!
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Claim £100 worth of Argos Vouchers upon completion of your transaction throughout 2008. Terms and conditions apply - see our Vouchers Special Offer page for full details.
Shire Direct and Shire Direct Mortgages are trading styles of Shire Processing Centre Limited which is
Authorised and regulated by the Financial Services Authority in respect of regulated mortgage products and general insurances.
Registered No: 302389. Commercial funding and Secured Loans are not regulated by the FSA.
Licensed Credit Brokers. Consumer Credit Licence Number: 349999.
Shire Processing Centre Limited is registered under the provisions of the Data Protection Act by the Information Commissioners Office: Registration No: Z6795249. Registered in England & Wales. Company number: 2732202. Telephone calls may be recorded for training, monitoring and security purposes. All applicants must be aged 18-years or over.
