What Happens When You Pay Off Your Mortgage?

It is every UK homeowners dream to pay off their debt on the property and become mortgage free, once you reach the end of your mortgage term you will be given a document by your lender called a mortgage release document, or mortgage satisfaction document. At the end of your mortgage you will own 100% of the equity in your property meaning you will have no more monthly mortgage payments, giving you extra money each month.

Can I Remortgage, After I Have Paid Of My Current Mortgage?
Once your current mortgage deal has come to an end you may have the ability to take out another mortgage, allowing you to borrow money against your property for any purpose such as a new car, home improvements, a second property or maybe a vacation. Because you will have 100% equity available in your property you will most likely have lots of options as you will be able to take our a very low equity mortgage deal.

Can I Borrow Money On My Property If I Am Over 55
In many circumstances bey the time you have reached the end of your mortgage you will be over 55, in some cases you may wish to remortgage and borrow money again against your homes equity, their are a number of options available such as equity release plans as well as interest only mortgages, that will allow you to release some of the equity you have in your home and give you access to the cash to spend on what you want. In some cases this you may want a large lump sum, in other circumstance you may wish to take out smaller amounts as you need them, in a drawback method.

Buying a Second Property, Using Equity From Your First Property
In some circumstances you may use the equity from your first property and use this to invest and purchase a second property, you may wish to do this to buy a buy to let mortgage, or alternatively you may wish to purchase a second home for a vacation.

Should I overpay my mortgage, to pay it off early?
Your mortgage payments is often your most expensive monthly outgoing, so paying it off early will result in you paying off your mortgage early and reducing the amount of interest that you pay over the mortgage term. Many mortgage products nowadays have an overpaying option allowing you to increase your monthly payments, although if you repay your mortgage to quickly you may be subject to early repayment charges on your mortgage.

If you have paid of your mortgage and looking for further borrowing contact us at First Choice Finance, we have numerous mortgage options for deed cases, including options for borrowing smaller amounts, that some mortgage companies may not offer. We are a mortgage broker with over 30 years experience, giving us lots of experience giving advice and discussing the different options available to you.

Mortgage Basics
The UK mortgage market offers customers a wide range of deals and offers. In order to apply for the most suited type, people usually ask the opinion of financial advisors.

However, you should first establish if you prefer an interest-only or repayment mortgage to limit your search.

Interest- Only Mortgage
An interest-only mortgage means that the lender will pay only the interest every month without paying any of the capital he has borrowed. Generally, when the lender has such a mortgage, he should also make a payment into an investment plan like savings accounts or similar. The idea is that the investment he has selected will be profitable enough in time to pay the capital at the end of the term.

Repayment of Mortgage
In the case of repayment mortgages, the lender pays the interest plus a small amount of the capital he has borrowed on a monthly basis. This way, if the lender respects his monthly rates, he will have finished paying for the mortgage at the end of the term.

This is considered the safest and most popular type of mortgage in UK.

Homeowner Secured Loans 9.8% APRC. Representative example: Borrow £50,000 over 180 months. 60 months at 8.1%, £497.83 pcm fixed at 60% LTV. Then 120 months at 10.1%, £539.89 pcm variable. Total payable £94,656.60. Total cost of credit £44,656.60 (including: £795 lender fee, £985 broker fee & £42,876.60 interest). First Choice are tied to certain loan providers.

Mortgages & Remortgages 8.4% APRC. Representative Example: Borrow £120,000 over 25 years at 5.99%, £778.86 pcm fixed for 3 years at 60% LTV. Then at 8.75%, £974.86 pcm, variable for 22 years. Total payable £286,416. Total cost of credit £166,416 (including: £985 broker fee, £999 lender fee & £164,432 interest)

Unsecured Personal Loans REPRESENTATIVE 49.9% APR (VARIABLE) First Choice are tied to certain unsecured lenders.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. Security is required on immovable property.

Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk

Established In 1988. Company Registration Number 2316399. Authorised & Regulated By The Financial Conduct Authority (FCA). Firm Reference Number 302981. Mortgages & Homeowner Secured Loans Are Secured On Your Home. We Advice Upon & Arrange Mortgages & Loans. We Are Not A Lender.

First Choice Finance is a trading style of First Choice Funding Limited of 54, Wybersley Road, High Lane, Stockport, SK6 8HB. Copyright protected.