Those looking to get onto the property ladder will often look at different options that can help them do this. For the best advice, you should be listening to the expert financial advisors Middlesbrough is home to. We can use our experience and specialist knowledge to help you make the best choice for your needs.
Cheaper but longer mortgages – worth it?
The budgets of a lot of homeowners cannot cover the cost of investing in property. This is why many of them find the idea of paying less over a much longer period of time perfect for them. We have seen a rapid extension of mortgage terms from 25 to 40 years.
Santander research has suggested that around 50% of buyers would consider a 40 year term mortgage. This would enable them to get onto the property ladder. Mortgage lenders are recognising the willingness to commit for so long. There was another study which found that you can take out over 50% of mortgages for a 40 year term.
Those looking at longer mortgages need to be completely aware of what they are committing to. The attraction is lower monthly repayments. But, you need to know what the payments will add up to in the long term.
People also typically have to undergo affordability checks. They may find that they don’t meet the requirements for a 30 year mortgage. This is more common with first time buyers. It can leave borrowers being directed to longer term ones.
It is possible to pay more than £100 less for each monthly repayment, but you will do this for longer. While this can appear great, you need to think about it. You need to know that you are up for borrowing for 40 years if you find that you can’t afford a 25 year mortgage. These lower payments are better for your budget but it will go on for longer and you will pay a lot more for your finance.
Robert Carlton is the home of the financial advisors Middlesbrough can turn to for first class assistance. This covers mortgages and pensions, along with various other areas. When you work with us, we will help you make the best decision for your money.
Get in touch now to discuss your needs and our work in more detail.