Considering an Interest Only Mortgage
As the name suggests, an Interest-Only mortgage means that you only pay the interest each month on the loan you take out. The amount you have borrowed then becomes payable at the end of the term of the mortgage.
Interest-Only mortgages are by no means right for every home buyer. There can be circumstances in which they are the best option. The most notable advantage is that monthly payments on your mortgage will be significantly cheaper than a Repayment mortgage.
In recent history, Interest-Only mortgages were incredibly attractive to borrowers for this reason; and lenders did not necessarily consider how the final balance would be repaid at the end of the term. After the financial crisis of 2008, this type of mortgage has become both less desirable to many borrowers and much harder to acquire. Lenders tend to require both a larger initial deposit and an approved financial plan to repay the capital sum borrowed at the end of the term.
However, the Interest-Only mortgage is still attractive to some areas of the property market, notably Buy-to-Let landlords.
Tailored Guidance on Interest-Only Mortgages
At The Mortgage Place, we have the requisite experience and the knowledge of the market to be able to advise clients on whether an Interest-Only mortgage is in their best interests. We can also assist with the wider financial planning needed to convince lenders that appropriate financial arrangements are in place to settle the outstanding loan at the end of the mortgage term.
Interest-Only Mortgage Advice From The Mortgage Place
From our Dorset based offices, The Mortgage Place works with clients throughout the county and surrounding areas.
To discuss whether an Interest-Only Mortgage loan is right for you, contact us for an appointment.