Beginner's guide to mortgages

By Deputy editor Tim Bennett Sep 21, 2012

Tim Bennett

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A property mortgage is the biggest debt most of us will ever take on. So choosing the right one is vital. Tim Bennett explains the basics of mortgages and highlights the main pitfalls to avoid.

 

• Watch all of Tim's video tutorials here

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Published in Video tutorials | More articles by Tim Bennett

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  • 1. playschool

    (24 September 2012, 10:30AM)  Complain about this comment

    I think we know a song about that, don't we children...

  • 2. Tim

    (24 September 2012, 11:10AM)  Complain about this comment

    Be great to know how it goes - my daughter doesn't often sing about mortgages but each to their own I guess.

  • 3. Really!

    (24 September 2012, 11:25AM)  Complain about this comment

    Is this for real! Who is this aimed at? People leaving school can't afford a mortgage, people who can actually get a mortgage should know these basic priciples, simple math really!

  • 4. Tim

    (24 September 2012, 11:32AM)  Complain about this comment

    Really. If people knew all the financial market basics we couldn't have got into the mess we did a few years ago. Who is their right minds would have signed up for an endowment mortgage for example? Or who would take out a mortgage of 125% of the value of their property? We are a dnagerously under-educated nation when it comes to even the simplest financial concepts. For example I recently met an investment trust director who could not explain gearing to me - at all. Scary. So no apologies for covering the basics, though admittedly some people shouldn't need them.

  • 5. Peter

    (24 September 2012, 12:25PM)  Complain about this comment

    @3. It's maths with an "s" by the way!

  • 6. House Price Crash

    (24 September 2012, 01:00PM)  Complain about this comment

    Anyone who gets an "Interest Only" Mortgage are silly, especially now house price's are finally falling and falling at there fastest pace believe it or not. Home owner's havnt woke up yet they think they can't fall anymore! I can assure you they will continue to fall for next couple of years at least as not many First Time Buyer's are out there due to prices being too expensive, Bank's not lending don't help and also wait for it "DEPOSIT" needed which peopel cannot afford. More people leaving the UK so we look forward to weak Growth in the coming year's. This is just the start of the house price crash and those who brought a house in the last 5 years are already in Negative Equity. Are you going to buy a house today knowing there going to be cheaper tomorrow?

  • 7. Boris MacDonut

    (27 September 2012, 12:28PM)  Complain about this comment

    #1 & #3. The average UK adult has a reading age of 11. Tim's guide is aimed at beginner's. It is a valuable tool Tim, well done.
    Worth mentioning don't commit more than 30% of THP to mortgage payments unless you earn a very large salary. Also never agree to mortgage exit fees, they contravene the consumer regs.

  • 8. Tim

    (27 September 2012, 03:12PM)  Complain about this comment

    Boris - thanks and agree with your comments.

  • 9. Orb

    (27 September 2012, 04:51PM)  Complain about this comment

    I cannot fathom why some - who consider themselves financially competent - would want to watch this, then take the P. I know a pilot - supposedly a job that requires above-average maths capabilities - who doesn't really know exactly how the world of finance works, let alone mortgages. In fact, I know of only one other individual who has a good understanding of finance, and yet still didn't notice his wife bankrupting them! They have since been made insolvent.

    I also know a considerably wealthy, retired, qualified Barclays FA who isn't able to piece together the inter-relationships between various financial aspects - scary!

  • 10. Orb

    (27 September 2012, 04:51PM)  Complain about this comment

    There is a VERY big difference between a maths academic and a financially savvy individual... how many of you out there are competently able to describe to another how credit card debt is designed to entrap you into becoming a debt slave?

    If I had my way, I'd FORCE a finance competence exam on anyone applying for debt in order to get it. Thanks Tim for your valuable contribution towards the education of Joe Public; we look forward to the next installation :-)

  • 11. Matt

    (06 November 2012, 09:57PM)  Complain about this comment

    This is certainly aimed at beginners but it always amazes me how financially naive many people are and it is great to have guides like this to provide a starting point into the subject.

    Would you ever plan to follow up on this with a 'mortgages advanced' course Tim?

  • 12. stephen

    (04 January 2013, 04:31AM)  Complain about this comment


    Tim,

    I would love you to a beginners video on 'gearing' so you could educate me and maybe the director at the same time.

    Keep up the good work!

    Steve

  • 13. Moderator

    (04 January 2013, 10:30AM)  Complain about this comment

    Stephen - you may find Tim's video on leverage of interest: http://www.moneyweek.com/investment-advice/how-to-invest/video-tutorials/video-tutorial-leverage-or-gearing-13001

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