A Deep Dive at Different Types of Mortgages

Nicole Ann Pore
4 Min Read

You might have a different perception of the term ‘mortgage’ depending on whereabouts you are on the homeowner spectrum. If you’re more familiar with it, you’ll understand it to be a type of loan that helps you to handle the immense cost of buying a house. However, you might not be much more familiar with it than that, and that can make the prospect of buying a house seem like a distant and unattainable ambition.

It doesn’t have to be that way, and while financial details such as these can be daunting to research, it’s a hurdle that you might have to overcome in order to reap the rewards. Fortunately, with the help of the internet, the knowledge that you seek is never too far away.

For When You Have Bad Credit

Part of what you might find difficult to come to terms with in regards to mortgages might relate to your own personal situation. Not everyone finds themselves on equal footing when it comes to this, and you might feel as though your bad credit could prevent you from getting a mortgage. In certain cases, this might be true, but it doesn’t mean that you’re out of options entirely. More people find themselves in this situation than you think, and recognizing that there is help at hand might help you feel less alone in your struggles. Outlets such as themoneyhub.co.uk can begin to illuminate the options at your disposal and can help you understand that your bad credit doesn’t have to be something that stops you from living your life.

Fixed-Rate Mortgages

This might be what you would consider being your ‘standard’ mortgage and might be what you’re familiar with through discussions with friends and family members who are currently paying theirs off. A fixed-rate mortgage provides you with an amount that you pay at a consistent rate that isn’t likely to change throughout its multiple year-long lifespans. Understanding what the standard option might be in this situation can help you to anchor yourself when you’re looking at alternatives. The fixed-rate mortgage option provides you with a baseline that you can come back to if the other options that your research doesn’t seem to provide you with the advantages that you’re looking for.

Interest-Only Mortgages

If you are finding yourself in a bit of a financial pinch but still keen to get on with the homeowning process, this might be the right move for you. After a certain point, interest-only mortgages are similar in function to fixed-rate mortgages. Before that point, however, you’ll only be paying the interest on the mortgage, meaning that you have some time to get yourself in a more comfortable position for the rest of the mortgage.

While that might sound like a more positive approach to you, it’s important to be aware of the downside. Namely, that this is a move that will elongate your repayment, generally increasing the amount of time that you’re spending paying off your mortgage. Still, what works for one person might not for another, so it’s worth being aware of all the options at your disposal.

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For Nicole Ann Pore, as cliche as it sounds, there is no place like home. She believes that is not only a responsibility but also a privilege to create and take care of a house where home is built. Nicole writes on topics that reveal the essence of a nice home, as well as home care and improvement tips. She is a daytime writer for Wincrest Bespoke, one of New South Wales’ most experienced home residential builders. | Nicole graduated Cum Laude from De La Salle University Manila, Philippines with a Bachelor’s Degree in Communication Arts.