03 Nov What about other products available?
Your AMS advisor will always endeavour to find any deals, incentives or offers that will suit your needs. For example there may be a cashback incentive whereby a sum of money is given back to you when your mortgage starts. You may use this for moving costs, or perhaps towards your legal fees but the advantage has to be weighed up and your advisor will help you to decide if it is beneficial for you, or if there are better deals on offer that don’t include cashback. It may be that other considerations are of higher importance to you such as the interest rate, the term or repayment charges.
95% mortgages declined after the financial crash but are on the increase again now. More lenders are offering mortgages with a small (5%) deposit – however, the risk to them is higher because if your property value drops you could be in negative equity. In other words, you owe more than the value of your property and if you default on your mortgage the bank will not get the value of the debt back. For this reason a 95% mortgage will attract higher interest rates to offset the risk to the lender. They are very beneficial though for borrowers with a smaller deposit. The opposite is also true – the higher your deposit, the lower rate you are likely to qualify for.
An offset mortgage is linked to a savings account. Instead of earning interest on your savings, the money is set against your mortgage. As a result you pay less interest on that debt. For example, if you had a £150,000 mortgage and £30,000 in savings, you would only be charged interest on £120,000.