Types of Mortgages
The varieties of mortgages available are becoming increasingly complex and it is important that you find one that suits you, and your circumstances and that you understand very clearly. We see this as an important part of our role. This is an important financial transaction and you should be clear on every aspect of the commitment you are entering into.

Although there are many loan solutions, the most common are the fixed rate conventional loans, either documented or stated, of FHA loan.

Fixed rate mortgages
A fixed rate mortgage gives an individual the opportunity to set their rate at a given level for a known period of time. Typical terms available range from 10-30 years. A fixed rate can guarantee peace of mind in times of interest rate volatility but they will not allow you to benefit from falls in interest rates below your given fixed level. A rule of thumb to consider here is that generally speaking the longer you wish to fix your rate for, the higher the rate at which you will fix it.

Capped rate mortgages
A variation on the theme of the fixed rate above is the capped rate. Though not always as commonly available, and dependent on your attitude, they offer what might be termed as either the best of both worlds or a compromise. The cap effectively means there is an upper limit on the interest rate you will pay, and if underlying variable rates rise above it you will be unaffected just as with the fixed rate. However rate falls will be reflected in your monthly payment. The period over which you are able to choose your capped rate also varies, and as with fixed rates the rule of thumb applies, that the longer you wish to enjoy your cap, the higher the rate you will pay.

Collared rate mortgages
If one thinks of a capped rate as a ceiling to one's mortgage payments, so the collar works as a floor, below which your payments cannot fall. This mechanism may be linked to another element, i.e. a cap or a discount, and will extend for a given period of time.

Variable rate mortgages
The variable rate fluctuates in that generally speaking it mirrors the direction of the Federal Governments base rate changes, these could be either up or down. Some individuals are happy to accept these fluctuations in their monthly payments, others prefer the option that some lenders offer, that allows them to alter the amount payable by the individual only once a year; if there have been fluctuations in the lender's variable rate this could mean underpaying or overpaying in any given year, and the difference is then applied the following year. Variable rates differ from lender to lender although usually in a very narrow band.

Discounted rate mortgage
Following on from the standard variable rate mortgage, many lenders allow individuals the opportunity to achieve a discount on their standard variable rate. As before the period over which the discount is available will vary, with larger discounts available for shorter periods of time and vice versa. The obvious benefit of this scheme is the ability to achieve savings no matter what the current variable rate is, but there is always the danger that interest rates could rise and the size of your discount become relatively less valuable.

Cashback mortgages
The options listed above each offer something a little different and can help to cater for the requirements of a varied client base; the cashback mortgage has long proved popular, whereby a lump sum is payable from the lender to the client on or after completion of the mortgage and for the client to do with as they please. The cashback is often linked to a proviso that the client goes on to the lender's standard variable rate.

"Mix and Match" combinations
For the very particular or the indecisive, "mix and match" options are sometimes available allowing the individual to combine for example a fixed rate with a cashback, or a capped rate with a discount rate etc. Again the word compromise springs to mind, as the rates offered in unison are unlikely to be as attractive as those offered in isolation.

Flexible mortgages or Current Account mortgages
Many lenders are now offering flexible mortgages though the range and benefits available can vary greatly. Flexible mortgages usually work on the basis of daily interest calculation, and offer the ability to underpay or overpay and even take payment holidays. The % repayment rate is usually variable, though some fixed and discounted options are appearing. Other facilities include the option to drawdown additional funds subject to criteria and even to link to a current account facility. They can be excellent products particularly for those types of people who are natural savers, never go overdrawn, and like to manage their financial affairs carefully.