“I just wanted to write to you and thank you for your professional and efficient mortgage services which enabled me to purchase the above property. I was very impressed by the amount of work you put into making this an easy transaction for me, without this help, I would have found it extremely stressful and frustrating. You took all the hassle out of this process and for that, I thank you.”
There are many different ways that mortgages can be repaid. Different methods suit different people, depending on their attitudes to their work, finances, personal circumstances and individual requirements – as a professional mortgage broker, Lee Fisher Associates offers advice on the different repayment options, and we will work with you to decide which is best for you.
Capital Repayment Mortgages
Also known as Capital and Interest mortgages, Capital Repayment mortgages are repaid through a monthly payment that combines part repayment of the capital sum you borrow with a payment towards the interest being charged on it.
In the early years of a Capital Repayment mortgage, mostly interest will be repaid with some capital paid off. As the term of the mortgage continues, the balance shifts – as the capital you pay gradually reduces the sum you owe, less interest is charged so an increasing proportion of your monthly payment repays the outstanding capital. At the end of the mortgage term, the whole of the capital has been repaid, and your property is yours.
Interest Only Mortgage
An Interest Only mortgage consists of making monthly mortgage payments of two separate parts: the first part paying the interest on a borrowed sum to the lender, and the second part depositing a certain amount into savings, preferably through an investment plan. Boosted either by interest or a good rate of return on your investments, your savings should be designed to increase in value over the term of the mortgage, giving you enough money to repay the mortgage debt at the end of the mortgage term.
The three types of investment plan commonly used for savings are:
- Individual Savings Accounts (ISAs).
- Personal Pensions.
A reputable Financial Advisor, who is qualified to give advice on pensions and investments, will be able to give advice on the most suitable of these methods for your circumstances. They will calculate how much you need to pay into your selected investment plan to achieve the amount required at the end of the mortgage term. If you do not have a Financial Advisor, we will be happy to recommend one.