Getting a Mortgage: A Beginner’s Guide

1

At Beagle Street, we offer Life Insurance products to suit different circumstances. We help a lot of people take their first steps towards security and peace of mind during big life changes, like owning their first home.

That usually means a first mortgage, and mortgage providers want to know their investment is secure. Different forms of Life Insurance exist which can offer protection for new homeowners and their dependents if the worst should happen, including Decreasing Term Life Insurance.

As the name suggests, this kind of policy is taken out for a set amount, which decreases over the policy’s lifespan (the term). This is different to Level Term Life Insurance, where the payout remains the same.

While it is possible to take out a Level Term policy to cover a mortgage, Decreasing Term Cover is sometimes preferred.

For something like a mortgage, which you pay off over time, it’s a way of ensuring the sum is covered without paying over the odds in premiums. Of course, this depends on the decrease of the mortgage matching the decrease of the policy.

In this handy guide, we’re offering practical pointers on getting the right mortgage to suit you, as well as a few extra things to look out for.

At Beagle Street, we offer Life Insurance products to suit different circumstances. We help a lot of people take their first steps towards security and peace of mind during big life changes, like owning their first home.

That usually means a first mortgage, and mortgage providers want to know their investment is secure. Different forms of Life Insurance exist which can offer protection for new homeowners and their dependents if the worst should happen, including Decreasing Term Life Insurance.

As the name suggests, this kind of policy is taken out for a set amount, which decreases over the policy’s lifespan (the term). This is different to Level Term Life Insurance, where the payout remains the same.

While it is possible to take out a Level Term policy to cover a mortgage, Decreasing Term Cover is sometimes preferred.

For something like a mortgage, which you pay off over time, it’s a way of ensuring the sum is covered without paying over the odds in premiums. Of course, this depends on the decrease of the mortgage matching the decrease of the policy.

In this handy guide, we’re offering practical pointers on getting the right mortgage to suit you, as well as a few extra things to look out for.

What is a mortgage?

A mortgage is a legal agreement where a financial institution like a bank or building society lends money (with interest) to someone wishing to buy a property or some land – that’s you.

Usually, these loans last for 25-30 years. However, the Bank of England’s Financial Stability Report 2017 spotted an increasing trend for longer mortgage terms of over 30 years.

The loan is secured against the value of the property. Once it’s paid off, the property is fully yours.

If, for whatever reason, you can’t pay back the mortgage sum, the lender can repossess the property and you lose your home.

Because of this risk, it’s crucial to do your homework and get the right mortgage for your circumstances, to be sure you can make those repayments.

You might want to seek independent financial advice if there’s any part of this mortgage definition, or the process itself that you’re not 100% comfortable with.

Next page

Different types of mortgages

Appendix