More on Endowment mortgages

Required Reading


  


More on Endowment mortgages


Beggars can't be choosers; borrowers usually can. Unless you are in a situation where mortgage money is so scarce that you are relying on a particular broker to scrape together a mortgage loan from somewhere, you will usually have a choice as to what sort of mortgage you should have.

The first thing to be clear about, however, is that if you really want a particular property, and it looks as if you'll have to move fast in order to get it, don't hold out unnecessarily long in order to get exactly the type of mortgage you want. With a website like this, it's easy to lose sight of the wood for the trees. But, assuming the end result you're aiming for is happiness (or something along those lines), what's more important -an extra £110 a month or a place you're really content in?

Still, the old financial gleam is bound to come back into the eye sooner or later. Assuming that you are not eligible to take out a pension mortgage as described in the last section, then your choice will be as follows:

Gross profile mortgage (GP)

Constant net repayment mortgage (CNR)

Low-cost endowment mortgage (LCE)

Full with-profits endowment mortgage (WP)

These four are in ascending order of cost: per £11,000, assuming a mortgage interest rate of 11.25%

% (and 11.5% for the endowment)

over 25 years, the cost for a basic-rate taxpayer per month is: GP CNR LCE WP

£17.26 £17.61 £17.79 £19.69


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Which mortgage to choose?


Some life companies make loans available from their own resources that is, from policyholders' funds borrowers who have a pension plan with that company. In times of a mortgage famine, this could be a useful extra string to your bow, though the interest rate may be slightly higher.

The loan will work in exactly the same way as a building society loan; and you must not expect the requirements to be any less stringent, simply because it is the life company which is lending you the money.

Many life companies, as well as having agreements with building societies, also have special arrangements with banks who will lend money on the strength of a pension plan. The most active banks in this field at the time of . . .... see: Which mortgage to choose?


Current Mortgage Offers

  • At Commercialise Yourself you can compare mortgages using our repayment calculator, look for special offers for first time buyers or for 95% loan to value mortgages and see the most popular choices, Nationwide, Accord etc, we now even have a buy to let section for the brave or heart or strong of pocket! You can send us an email if you want to know more about mortgages and what we do and we will get back to you as soon as we are able. offers@commercialise.org.uk

     

    Finding the right mortgage can be stressful, but we’re here to help you every step of the way.

    Even if you have no proof of income, poor credit rating or facing repossession of your home, we can normally say YES (even if the high street lenders have said NO)!

    Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. The overall cost for comparison is 7.9% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. There will be a fee for mortgage advice. The precise amount will depend upon your circumstances but our average fee is 2.36% of the loan value. We are authorised and regulated by the Financial Services Authority for regulated mortgage and non-investment insurance contracts.