Mortgage

Taking out a mortgage is one of the biggest financial decisions you will make and with a wide range of options to choose from across the market it can be difficult to decide which type of mortgage deal is going to be right for you.

A mortgage is security for a loan on the property that you own. It is your personal guarantee to repay the loan as well as a pledge of the property as security for the loan. The mortgagor (the buyer) promises to repay principal and interest, to keep the home insured, to pay all taxes and keep the property in good condition.

A mortgage is the probably the biggest loan you'll ever take out and so it's important to look at all your options before you sign on the dotted line. There is a good range of products on offer today and although the increase in choice is great because it means more competitive rates, actually picking the right mortgage can be a bit bewildering.

Before you decide on a mortgage work out how big your budget is and how much you will be able to repay each month. Mortgage lenders will calculate how much they are willing to lend you by looking at your income.

Don't over stretch yourself because you could find making repayments difficult if interest rates increase or your situation changes. When calculating your budget you will also need to include added costs such as the loan for a deposit - if you haven’t money saved for this - buildings and contents insurance and life insurance.