Some mortgage lenders will offer tempting cash back options as soon as you have completed your mortgage to help you furnish your home or decorate etc.

Once completed you will receive a small percentage in the form of a cash advance cash back to you.

These can be very tempting for first time buyers on a limited budget or without a stock of furniture to kit out your new home.

A cash back mortgage actually provides you with a set cash lump sum which is paid to you in addition to the mortgage amount which is paid through the solicitor handling the mortgage conveyance. A cash back mortgage can be very tempting but there are always down sides to such deals that require your consideration and understanding before you commit.

It is worth pointing out that should you decide to want to change to a different type of mortgage later on there can be charges applied or if you want to repay the mortgage by moving within a specified term. In these cases lenders may ask you to repay the cash back advance as well as the settlement figure on the loan.

The lender wants to try to ‘tie you in’ to them and the cash back offer may at first appear to be appealing you have to weigh up the pros and cons of the deal before you commit. Mortgage lenders are not in the business to be kind and overly generous so you need to be sure you are fully aware of the penalties and charges the lender will levy should you try to move away or transfer your mortgage in the future.

If you need additional cash to help furnish your new home then you probably would be better off to discuss this with your bank to arrange a short term loan.

You should always take advice before you commit yourself to borrowing from a lender with a cash back type mortgage.

See all mortgage types