Mortgages: The KFI and other important points.
Many people are unwilling to take a risk on mortgages at the moment. With rates continuing to fluctuate it is hard for people to have faith in the market. The one thing to remember is, there are many options for you and there is help and advice on offer and you should take advantage of it.
A new law introduced on the 31st October 2004 stated that all lenders are required to supply a Key Facts Illustration (KFI) before you apply for a mortgage. The KFI is designed to help you choose which mortgage is best for you.
The KFI is several pages long and highlights some key facts about mortgages. It describes the mortgage, the rates and periods available. It must also show the customer any incentives and features that are associated with that specific policy.
The KFI must also show any restrictions that may apply, this helps to avoid any nasty surprises that can happen when applying for a mortgage. Added to these stipulations, the KFI must show the predicted cost of a 1% increase in interest rates. This is especially important when you come to remortgage.
The Key Facts Illustration is very useful for customers and is a good starting place for finding the right mortgage deal for you. There are other types of mortgage and over the past couple of years; overseas mortgages have become increasingly popular. Check the small print of your policy to ensure you do not get caught out on any details.
Some providers will only offer a certain amount so check the minimum and maximum loan amounts when checking your options. Be careful that you fully understand any charges you could possibly incur such as an Early Repayment charge.
With a vulnerable market, considering your options is extremely important. Your mortgage is the biggest financial commitment you will ever make so ensure you make the right decision and find the best deal for you.
With deals such as overseas mortgages available, choosing which deal is best for you can be difficult when rates are constantly changing. When you come to remortgage consider all the options and rates and search online and compare providers to find the best deals on mortgages available.
About the Author: Karl Bantleman is a UK based author with extensive experience within the financial sector.
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