Are cash back mortgages good?

A cash back mortgage is one where you get a lump sum on taking out the mortgage. This can be extremely useful when you are buying a new house as there are many expenses. Not only will you need to pay the solicitor and removal company, but you may have other things to buy for the house as well.

Often you will need to organise curtains, decorating and maybe even some bigger renovations. You may need to replace the kitchen, bathroom or even the roof with the help of Avalanche Roofing. There might windows and doors to replace or heating to put in. Often extra furniture is needed and finding the money to pay for this can be hard, especially if you have just used as much as you possibly can to pay for the deposit on the property. You may have bigger outgoings as well with the mortgage payments, insurance and things like that, which go along with owning a house, so it could be difficult to be able to save up for these things once you have moved in to the property.

cash back mortgages

It is worth thinking hard before going for this option though. Any cash back that you get will be added on to your mortgage debt. Even if you have negotiated a really good mortgage deal, it tends work out that you will end up paying back three times what you borrowed, this is a lot of money. Therefore, there could be cheaper ways to borrow the money, if you can pay it back more quickly. You may find that others means of borrowing, like short term loans or overdrafts, might have higher interest rates, but if you calculate the cost of borrowing the money then you may find it is higher. You can do this by multiplying the monthly interest by the amount of months you will be paying it for. You can find savings and mortgage calculators which can help you with doing this, so the maths is not something that you will need to worry about.

If you do not like to be in debt then borrowing extra money is probably not  good idea. It can be cheaper to borrow money in a different way as well and so this can be worth looking in to. If you feel you will struggle financially when you move, then it can be a way to get some cash to get you started though.