Many mortgage deals come with early repayment or redemption charges.
You can come across a charge if you decide to repay part of the standard mortgage or loan.
Below are some charges: - An assured number of months interest, e.
g.
- 6 months - A percentage of the total sum already repaid, e.
g.
if you have already paid £20k of a£200k loan.
- A percentage of the original mortgage amount.
- A percentage of the current mortgage balance To repay part or all of a mortgage is an essential element to a mortgage's Terms & Conditions.
You might feel that it is unlikely you still want to make sure you know precisely what types of charges are involved.
Many mortgage advisors state that flexibility in this matter is one of the most essential components when comparing similar mortgages.
Different Ways To Compare Early Redemption Fees Nearly most mortgages are different and this can make comparing them a problem.
However if you ask the subsequent four questions below you will have a better idea of the advantages and disadvantages from one mortgage deal to the other.
Another factor to consider is to always get written confirmation of any answers or advice that you have.
1.
What early redemption penalties are there? 2.
There is an early redemption penalty, how long does the penalty last for? 3.
How much is the cost of a penalty broken down year by year.
Year 1, year 2 etc.
In a condition like this you might be treated unfairly, do not accept this.
4.
There might be over-payment charges? e.
g.
your mortgage payments may be £600 a month but what is the case if you frequently want to add in another £600.
Is there any type of occurring charge, and if not what are the allied costs? To conclude, do your homework into this matter.
No mortgage is the same, and realise the financial services industry is often sneaky in that what on the surface is a great mortgage, can come with strings attached especially when it comes to early redemption penalties.