For a mortgage adviser, that could be viewed as a bold statement. But hear me out…
Who actually wants a mortgage?
Nope, me neither……..so why am I so passionate about the work we do?
Well, I understand that for those of you buying or re-mortgaging your home, you don’t really “want” a mortgage…. but you do want the home, right?
The reality is that many people “need” a mortgage and it’s a means to the end…seriously, we get it.
So, it’s our job to ensure that you have the right structure for your own personal scenario, circumstances and goals, in the most competitive way. Once we’ve done that, we’ll be telling you about how to get the mortgage gone in quick time….that’s where the power of overpaying comes in!
A mortgage is a debt like any other, and the longer you keep it the more it costs. Overpay & you could be mortgage-free earlier.
You could think of overpaying your mortgage as a form of saving. For example, if you were repaying a 3% mortgage – and cleared £10,000 of it – that’s £300 a year you’d save in interest! You simply can’t get this amount back with any safe saving accounts.
Things to bear in mind –
- Watch out for ERCs (Early Repayment Charges)! You can find details of this on your annual mortgage statement….but you really don’t want to be paying them!
- Pay off your most expensive debt first! Your credit cards are likely to be costing more than your mortgage!
- Keep a healthy rainy-day fund for emergencies… three to six month’s outgoings is good for most households.
- There aren’t too many modern mortgages where interest is paid annually…but if you have one of these, timing when you make an overpayment is key.
- Ask your mortgage company to shorten the term, NOT reduce the monthly payment. You’ll pay less overall this way.
So there you have it, I’m not a fan of residential mortgages…well, not for too long anyway.
Your property may be repossessed if you do not keep up repayments on your mortgage.