Is it better to fix your mortgage at 0.98% over five years, or, as this latest high street re-mortgage hook requires a 40% deposit (or equity build-up) along with £1,499 fee, would a 0.91% over two years be a better offering? Or could 0.90% be the tempting number?
If you could design your own mortgage, how would you be fair to all?
The Boardroom is waiting, you’re ready to announce a new product (we won’t get into the whys and wherefores’ of Shareholders opinions). You’ve consulted with the number crunchers, and they’ve proffered their preferences; the price you need to target, the list (as endlessly long as a lockdown) of what characteristics is needed from Applicants has been put forward by the those in the legal know, and the Big 3 has been created.
  1. Interest Rate
  2. Minimum Amount and Maximum Amount
  3. The Terms
Each of these needs to react to circling market factors and put a smile on the Board before your wants.
So, the question is, how do you please everyone and still get what you want?
For what it’s worth, here’s my way of thinking.
The Board need their money back, and a profit. You would need your best outcome. Does your mortgage having monthly payments that can be met come above an enticing Interest Rate, or, do you want the paying-down of a loan above running with a loan. Getting outstanding debt down is what makes future planning more reachable. Mortgage and property seem to be a core of most ‘if I won the lottery’ wish lists. Without being on that mortgage ladder long-term plans are stilted for some. So, would you want sustainable monthly payments to support the beginning of plans in your self-designed mortgage?
But what about the risk factors? Lenders do like their Credit Scores – and every credit score has a story behind it…. Including potential, so credit score hill climbs would need rectifying with evidence and the Board would also need a fair interest rate thrown in.
All seems fair?
But what about a fair price for a property? How do you determine that one…?
Article and Image credit: Copyright SUF © 2021


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