Overpayments-If you find yourself with a little extra cash some months and feel you can pay more than your expected amount, you may want to do some research into a mortgage deal with flexible repayment terms. If you are self employed especially, you will appreciate it more if you can pay more one month and less another. Some mortgages let you have payment holidays where you can miss a month's payment, this will simply be added on at the end and interest rates will be higher than an average mortgage.
Drop lock-
A drop lock mortgage starts as a tracker deal which follows the base rate, then once happy with a certain rate you can then secure it by switching to a fixed rate. This is ideal if you think the base rates will not decrease anymore or if you expect it to increase.
Arrears-
An arrear is where you fail to keep up with a month's repayment. Most lenders will look to seize your property if you fall into six month's of arrears and you do not have a payment plan available.
The term-
The term is the length of time it takes for you to pay the loan off. This is usually 25 years as this enables you to pay off the monthly repayments comfortably. If you lengthen the term, then the lower the monthly repayments will be but you will inevitably pay more interest. The opposite happens if you were to shorten the term, higher monthly repayments but lower overall interest and you obviously will become debt free sooner.
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