This means that your monthly payments will only cover the interest that you are paying on the loan. Because of this you are never paying off the principle sum and therefore when you reach the end of your mortgage term the amount that you will owe the mortgage lender will be unchanged. As this sum of money is still outstanding at the end of the mortgage period, you will need to have made provisions to finance a lump sum payment for this entire amount.
The main options for financing the lump sum payment are to:
-
Make regular payments into a savings or other
investment every month.
-
To attain a lump sum from another source such
as an inheritance or perhaps the sale of another property.
-
Convert to a repayment mortgage during the
term of the original interest only mortgage. This is
particularly suitable if currently your earnings are at a lower
level but are expected to increase in the future as it keeps
the monthly payments down at the beginning and then
allows you to pay higher monthly repayments later on a
repayment mortgage.
-
To sell the mortgaged property itself to be able to pay
off the original loan taken out for it.
Endsleigh Financial Independent Tailoring are able to guide you through the best options available to you for interest only mortgages, being able to look at 1000's of interest only mortgage products within the UK marketplace. Compare interest only mortgages now by completing our online quote form.
Our mortgage comparison service is unlike many other mortgage companies and brokers. Our staff are salaried, not paid commission on the products that they sell, meaning they really do act independently within the mortgage marketplace to try to get you the best deal.
Fees - We do not charge a fee for advising on Pure Protection policies, however for some services we offer you the choice of whether you pay us a fee or whether we are paid by commission. There is no additional charge made for dealing with us by telephone.
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