TYPES OF MORTGAGES.   Although you will hear various words used like tracker,endownment,offset etc mortgages are generally of two main kinds. REPAYMENT MORTGAGE or INTEREST ONLY MORTGAGE.   With a repayment mortgage your monthly repayment pays both capital and interest. With an interest only mortgage you are only paying the interest so you will need another vehicle to create the funds to pay back the capital. This is the endownment mortgage that has taken a lot of flack as many holders of this type of mortgage are finding that the value of the investments to repay back the capital are insufficent.   FIXED RATE MORTGAGES.   As the name suggests these are mortgages where the interest rate is set so if interest rates rise you will not pay any more. These are great when interest rates are rising but not so good when rates are falling.     STANDARD VARIABLE RATE MORTGAGES (SVR)   With these the payments rise and fall according to the interest rate at the time. People with this type on mortgage were hit very hard when interest rates hit 15% after Black Wednesday (16/09/1992)   TRACKER MORTGAGES   This is oftern cheaper than a SVR at the start as tracks base rate at a fixed % until it reverts to a standard SVR mortgage.   OFFSET MORTGAGES   These mortgages link your savings and  mortgage so you only pay interest on the difference between the 2 figues.   CAPPED MORTGAGES.   These are similar to fixed rate mortgages as the interest rate will nor increase beyond a certain point. They often have a minimum rate they can fall to as well as a maximum rate they can rise too.

What is a Muslim Mortgage and why is it different? Traditional UK mortgage products are generally unsuitable for Muslim customers as they are not compatible with Islamic (or Sharia) law. Under Islamic law, the payment or receipt of interest is forbidden. This requires a change to the book keeping and computer systems of banks and building societies; but a number of lenders have developed mortgage products specifically for Muslims. Typically, under an Islamic mortgage arrangement the lender will purchase the property and then sell it on at a higher price to the customer, who will then pay back the capital over a set period of time via monthly capital payments. Alternatively, the customer could pay the lender a 'rental payment' for use of the property and then, once the agreed period of time has elapsed, ownership of the property is transferred to the customer. At present, only a handful of lenders operate in the Islamic mortgage market in the UK largely due to the complexities of these mortgage products.

TIPS WHEN THINKING ABOUT A MORTGAGE LOAN

1/ Consider Trying to over pay the mortgage!   For example, if you borrow £100,000 at 6% over 25 years, you'll pay it back at £643 a month. The total charge for credit will be £93,000. But if you can overpay by £100 a month you'll clear the loan in less than 19 years, giving you 6 years of mortgage-free living and saving a staggering £25,000 in interest and saving you thousands of pounds. 2/ Consider whether you really need such a large mortgage. It makes me smile that people with 0-2 kids want a mansion, when two generations ago their grandparents were sleeping six to a small property, and they managed just fine. 3/Start saving asap. Every pound saved is a pound towards your deposit. A pound towards your deposit is a pound you'll not be paying interest on. People think it is great if they get a 95-100% mortgage. But it's their lender who are laughing at the bank. 4/Shop around for mortgage quotes. This one is very obvious but it is surprising how many people take the first mortgage offer that their bank or broker offers. You should be looking to get at least 4 quotes. 5/Check your credit report. Because lenders place so much on this you should check it out before applying as it has been reported that as many as 50% of all credit reports contain inaccuracies. Allow time to review and correct any as this could save you 1000's of pounds. You can get your credit report for free from EXPERIAN 6/Get your mortgage Pre-Approved. This gives you additional bargaining leverage. A home seller may be more likely to accept your offer with pre-approval than another buyer without it. 7 /Read the weekend newspapers. These normally list some of the best mortgage rates available in their weekend money columns. 8/ Look at the list below for the UK's largest mortgage lenders.  The Tip here is that if they were not offering a competitive deal they would not have such a large share of the mortgage market. 9/ Look at the mortgage facts page on the right to see the rates various mortgages were costing on the last update. (remember these are historical mortgage figures)

TOP 10 MORTGAGE LENDERS/PROVIDERS BY GROSS MORTGAGE LENDING IN 2007

HBOS 20.1% ABBEY 9.8% NATIONWIDE 9.3% NORTHERN ROCK 8.1% LLOYDS TSB 8.1% BARCLAYS 6.3% RBS 6.2% BRADFORD & BINGLEY 3.9% ALLIANCE AND LEICESTER 3.6% HSBC 2.8%