Mortgage is a very tricky financial subject. People who don’t have any background in business, economics and finance often find it a lot difficult to understand their pros and cons. However, before people make decisions about what kind of mortgage would be best for them, it is extremely important to at-least breeze through the disadvantages associated with each of the different types of mortgages.

Below we list some of the major disadvantages of different kinds of mortgages:

Interest only mortgages

• The interest rates offered are relatively higher as compared to other mortgage types
• If a person is able to save money while paying only interests, he will usually spend it somewhere else like home improvement, car etc
• Usually works well for only those people who have large assets

Remortgages

• Penalty charges are applied when new mortgage is re mortgaged in future
• Although remortgage lure clients and customers by low interest rates, these interest rates don’t last for a longer duration
• If the borrower defaults, his property can be legally taken over by the mortgage lender

Self cert mortgages

• Self cert mortgages usually require very high deposits
• The mortgage borrowers are left to make their own decisions which may turn out to be counter productive and wrong later on

Self build mortgages

• Finding appropriate property is a difficult task
• People are at their own discretion to make decisions regarding finances
• Personal contacts are usually required to save time and energy and focus more on the task at hand