When buying a home, there are numerous decisions to be made. One of the most common questions is whether to get a fixed or variable interest rate mortgage. A cashback mortgage offers something similar to a variable mortgage but with some key differences that set it apart. Cashback mortgages offer potential homebuyers the opportunity to receive cash back once they have purchased their home. They also come with a number of other benefits that make them an excellent choice for many prospective homebuyers. If you’re considering getting a cashback mortgage, here are some solid reasons why you should!
You Can Get Your Money Back
One of the biggest advantages of cashback mortgages is that you risk getting your money back! This is not the case with conventional mortgages, especially when fixed rate mortgages are involved. This is because with a cashback mortgage, you’ll sign an agreement with your lender to get your cash back at a certain future date. This means that you can use your cash back as a deposit on a future property, or for any other purpose of your choice. Whereas with a conventional mortgage, you’ll have to make repayments for the full term. If you need to find another property, you may have a difficult time doing so unless you have a tidy sum saved up.
Fixed Rate Loans Come with Safeguards
One thing to consider, however, is that fixed rate loans come with certain safeguards to protect lenders. With a cashback mortgage, lenders are less likely to offer terms of 25 years or less, even if you have a large deposit. If you don’t have a large deposit, you may have a harder time finding a lender that will offer you a fixed rate mortgage for a shorter period. Nevertheless, it’s important to remember that a prospective homebuyer who wants to get a cashback mortgage has something to offer the lender as well. There are many people who are interested in getting a cashback mortgage but can’t because they don’t meet the requirements. To find out whether you’re eligible, read on!
Cashback Mortgages Are Easy to Assess
Another excellent reason to choose a cashback mortgage is that they are easy to assess. This means that there aren’t as many criteria that you have to meet in order to get approved for one. Whereas fixed rate mortgages often have a number of restrictions attached to them. For example, some lenders only offer fixed rate mortgages for 20 years or more. Even if you have a significant deposit, you may find that it’s difficult to get a fixed rate mortgage with your desired terms. However, with a cashback mortgage, the lender will have the option to take your cash back. This means that they’re willing to take more of a risk and approve you for a mortgage with a shorter term.
Choosing a cashback mortgage is a smart move for homebuyers who have a solid plan for how to use the money. They’re also an excellent option for those who don’t have a large deposit or have credit issues. Because cashback mortgages are easier to assess, you’ll have a better chance of getting approved for one. You may even be able to get a mortgage with a shorter term! Cashback mortgages are great for those who are looking to save money. It’s never too early to start saving for your next home, after all!