UK Mortgages Explained:

CASH BACK MORTGAGE

If you are in a difficult position and need extra cash for improvements, furnishing or anything else loan lenders offer you the "Cash Back Mortgage" deal. You receive 5% of your loan up to 12,500. As most of the deals "Cash Back Mortgage" has its advantages and disadvantages. You will need to pay back the sum you received only if you decide to redeem your mortgage before the fifth year from completion, the interest is calculated daily so it could result in interest savings. But take in mind that mortgage rates could be higher when the benefit period ends or that if you decide to repay earlier you will be charged with early repayment fee.

REPAYMENT MORTGAGES

They involve a monthly payment covering the interest on your loan and a repayment of capital. The main advantages are that it is simple, it guarantees that you will be repaid the whole sum as long as you pay your monthly repayments and that it offers you different repayment periods. Bear in mind that at first most of the repayments will be interest and in the later years the capital will be paid off.

INTEREST ONLY MORTGAGES

That deal is for people knowing that they will be able to repay their whole loan in a couple of years. Interest Only Mortgage deal considers that and you are only charged with an interest until you repay the whole loan at once. Almost all the loan lenders give you that option so your payments during your contract are as less as possible. But you have to take in mind that you receive 85% of the loan you wish to take and that you are supposed to pay back the whole capital at the end of your deal.

FIXED MORTGAGES

If you wish to take this deal you may benefit from the fact that the interest rate stays the same during the period of your contract. But there is a possibility you might lose if the interest rate becomes lower than the one for your deal. The advantages are that your payments are fixed during a set period of time, you can choose between different periods usually between 2 to 5 years or sometimes more. The only disadvantage is that if you decide to repay everything before the end of the period you are charged with early repayment fee.

TRACKER MORTGAGES

A variable rate tracker mortgage offer reduced payments at first. The interest rate on your mortgage will be a percentage above or below the Bank of England base rate for a set period of time. After the initial period you rate transfers into your lender's original variable interest rate. You may benefit from interest savings in the early years, the differential is guaranteed during the initial tracker period, but bare in mind that the mortgages rates may be higher when the benefit period ends and you have to consider how it will affect your monthly payments.

Discount and Stepped Discount Mortgages

Those deals are connected with a variable interest rate so you may benefit if the Standard Variable rate falls. If you have chosen Stepped Discount Mortgage the initial interest rate is very low and it gets higher in the next Stepped Discount periods. As you may benefit from the variable interest rate you may also lose if the Base Rate of Bank of England rises

Tracker and Stepped Tracker Mortgages

That product has an initial Tracker Rate that is set to the base rate of the Bank of England. Following this the rate is set according to your lender's Standard Variable Interest Rate. Changing your APR is what you have to take that in mind.

Variable and Stepped Variable Mortgages

The deal starts with an initial offer period, followed by a rate that applies for the reminder of the term. The rates are set at your lender's Standard Variable Interest Rate or a discount or premium to this rate. This is similar to the Discount Mortgage deal because you may also benefit from the variable interest way in the same way.

Buy-to-let Mortgages

That type of product gives you the opportunity to rent your property to someone for 1.25 times your mortgage payment so you can cover your expenses on your loan and even benefit from that. Of course there are some restrictions on that deal, for example no students are allowed to be tenants and the maximum number of people living in the property should not be more than six.

Bridging Loan

Although providing their customers the best deals for loans and mortgages, Amber Homeloans continue to improve itself by giving the clients newer deals. For example you may choose the Bridging Loan deal so you may borrow a temporary loan to buy a new home before selling your old one.