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REPAYMENT MORTGAGE (CAPITAL & INTEREST)
A capital and interest mortgage (often called a Repayment Mortgage) is the most common type of mortgage being offered at the moment. With this type of mortgage, you’ll make monthly repayments for an agreed period of time (known as the ‘term’ of the mortgage) until you’ve paid back both the capital and the interest. This means that the amount you owe will get smaller every month and, as long as you keep up the repayments, your mortgage will be repaid in full at the end of the term.
When you take out an interest-only mortgage, your monthly payments pay back the interest on what you’ve borrowed, rather than the sum itself.
At the end of the term, you pay back the full amount outstanding in one lump sum.
This feature allows you to move the product you currently have over to a new property if you move house. The interest rates and monthly payments will remain the same after the house move although any additional money you borrow to purchase your new home will be subject to the rates and lending criteria available at the time you apply for the mortgage to be ported.
Remortgaging is the transfer of a mortgage from one lender to another. You continue to live in the same house, but your monthly payments are made to a different lender. The purpose of Remortgaging is often to obtain a more favourable interest rate when your current deal has expired, but it may also be used to raise additional funds – for home improvements, to repay other debts etc.
A product transfer mortgage is a remortgage with your current mortgage lender. It involves switching to a new mortgage deal with them when your current deal runs out.
A guarantor mortgage (also known as a family-assisted mortgage) is a mortgage deal where another person agrees to take on responsibility for your repayments in the event that you can’t pay. That person is known as the ‘guarantor’ and is usually a family member or close friend of the mortgage applicant.
Debt consolidation is the act of taking out a single loan to pay off debts. You can use a secured or unsecured loan for a debt consolidation.
BUY TO LET
A buy-to-let mortgage is specifically targeted at those who purchase property as a rental investment. You’ll then need to choose between a repayment-only or interest-only mortgage. Bear in mind that buy-to-let mortgages work differently to standard mortgages, as the minimum deposit required is much higher (normally, an average of 25% of the property’s value)
Insurance that pays out a sum of money on the death of the person insured. The policy is usually taken out for a set number of years (the term of the policy). After that the policy ends and no money would be paid out if the insured person dies after the policy ends.
CRITICAL ILLNESS COVER (CIC)
Critical illness cover is a type of insurance that pays out a tax-free lump sum if you're diagnosed with a critical illness that meets the policy definitions during the policy term. The policy does not cover every illness, and illnesses that are covered may have limits regarding how severe the illness must be to make a claim.
WHOLE OF LIFE COVER
Whole-of-life insurance is life insurance that covers you for the entirety of your life, rather than for a set term. It means your family will receive a pay-out however long you live, as long as you keep paying the premiums.
Income Protection pays out a monthly sum to replace part of your income if you are unable to work due to illness or injury. It continues to pay out until you have recovered or until your retirement, your death, your policy ends or the limited claim period on your policy ends (whichever is sooner).
TOTAL & PERMANENT DISABILITY
This cover is commonly offered on life insurance and critical illness insurance policies. It pays out an agreed sum of money if you have an illness or injury that means you’re permanently incapacitated.
TERMINAL ILLNESS BENEFIT
Many life insurance policies include terminal illness benefit. This means the insurer would pay out if you’re diagnosed with a terminal illness within the policy term and aren't expected to live longer than 12 months. Once the terminal illness benefit has been paid, the life insurance policy ends, and won’t pay out when you die.Type your paragraph here.