At Saracens Solicitors, we understand that buying a house can be a daunting process but we are here to help as your mortgage solicitor in London. We can help you with the process of buying or selling your house. We want to help in any we can and that’s why we have put together this handy guide of the common risks associated with mortgages and how to avoid them.
The most obvious risk of having a mortgage is that you will not be able to keep up with the repayments due to a change in circumstances. You can take out mortgage protection insurance to help guard against loss of income. There are usually special terms involved in such a policy and it is important to understand what you are getting into. Just like you would involve a mortgage solicitor in London when it comes to your house sale, it is best to speak to a financial adviser about insurance.
Negative equity is when your home is worth less than it did when you bought it so , if you sold it, the money from the sale would not cover the amount remaining on the mortgage. A mortgage solicitor in London, like Saracens Solicitors, can give you informed advice on the state of the housing market compared with historical environments but no one can accurately predict the behaviour of the market with certainty. Make sure you do your research regarding other house prices in the area so that you are not paying too much for your property. This is one way to mitigate the risk.
Paying back much more than you borrowed
Make sure you understand the terms of your mortgage before you sign on the dotted line. Your mortgage advisor is legally bound to make sure that you understand the agreement you are entering into. You will pay back more than you have borrowed so ensure that you know how much. For example, if you borrow £250,000 over a 5-year term and the average interest rate is around 5%, you will eventually pay back £443,453. This is fairly typical of a long-term loan of this type.
For more advice, a mortgage solicitor in London, such as Saracens Solicitors, is on hand.