| |
| |
|
Mortgage & Refinancing Information |
|
|
|
Types of Mortgages
Here is a useful guide to the different types of mortgages that are available. A mortgage is a loan you take out to buy property. You can get a mortgage direct from the lender such as banks, building societies and specialist mortgage lenders. Your mortgage is probably the biggest loan you will ever take out, so it is important to get a mortgage that suits you. This will depend on your personal circumstances and your plans for the future. Many mortgages have hidden drawbacks. Get independent advice before you choose a mortgage. There are two basic types of mortgage, interest-only and repayment. The option you choose is determined by the way you want to repay your loan. There is no hard and fast rule about which is better. It is a matter of individual preference. Interest only An interest-only mortgage allows you to repay just the interest on your loan, but you have to take out an investment that will mature to pay off the outstanding amount. If your investment performs well then you may have some money left over after paying back your mortgage. But there is also a risk that the investment will under-perform leaving you to make up any shortfall. Repayment A repayment mortgage requires you to pay back both interest and loan capital, so at the end of your mortgage period there is no money owing. Early on you pay mostly interest, so it might seem that the outstanding balance never gets lower. But later on you will repay more capital, and the total will decrease more quickly. Here is a selection of the different mortgages that are available: Discount mortgages This is where lenders offer a reduction on the standard variable rate for a fixed period. This type of mortgage is good for someone wanting to make savings in the early days of owning a property. But be aware that the rate can change as it is fixed to the standard variable rate. Fixed mortgages With a fixed rate, your payments stay the same no matter what happens to the base rate. This is a sensible option for people who want to know exactly what they will be paying for a certain period. There is always a risk that, if interest rates fall, you might be left paying an uncompetitive rate. On the other hand, a rise in rates will leave you paying less than people on other schemes. Tracker mortgages This type of mortgage follows the Bank of England base rate. It will usually stay a set margin above the base rate for the duration of the loan. They are suitable for people who think base rates might be on a downward trend. Capped mortgages These schemes are similar to fixed rate mortgages, but give you a get-out if rates fall sharply. They allow you to pay either the capped rate or the lender's standard variable rate, whichever is lower. They can initially be slightly more expensive than other deals, but if rates fall they can pay off. Offset mortgages They will link your current account and your mortgage. You pay your salary into an account and your mortgage payment is taken out as per usual. But any extra cash in the account is also used to offset against the amount you owe on the mortgage, so you pay less interest. Flexible mortgages Another way of managing your mortgage is through a flexible arrangement. This allows you to pay more money off your mortgage when you have it, or take a payment holiday if things are a bit tight. Some lenders will allow you to overpay each month and withdraw the extra cash if you need it later. And if you have the money, you can pay off your mortgage early. Any money you can pay off early will save you interest payments. You may freely reprint this article provided the author's biography remains intact: About The Author
MORE RESOURCES:
Mortgage-Refinance - Google News |
|
|
|
RELATED ARTICLES
Thought You Can Go All Alone In Mortgages! Mortgage Advice Beneficial In All Important Decisions Mortgages are easy as long as you understand them well. But how many borrowers can be confident of their knowledge of mortgages. Home Equity - Is it Time to Cash Out and Move? During the last five years, home prices have increased nationwide. In some parts of the country, notably California, home prices have doubled or even tripled. Home Equity Loans in Texas A few notes of importance: This only applies to a homestead property, that is the customers primary residence LTV refers to Loan to Value, meaning the loan amount as compared to the value of the home. As an example, a loan of $75,000 on a home valued at $100,000 would be a loan at 75% LTV. Shopping for A Mortgage? Do Your Homework First If you happen to be shopping around for a mortgage, it is very important that you first take the necessary time to do your homework.When I say homework, I am talking about research. Finding the Best Home Improvement Loans When the time comes to do work around the house, finding good deals on home improvement loans can be vitally important.Home improvement loans can be used to help you improve any part of your house or other real estate, providing you with the money to get the materials that you need and to hire the professionals that can get the job done. Home Mortgages: Think Before You Borrow In today's overheated housing market, lenders are making it easier and easier to get a mortgage. For example, some lenders have lowered the credit score needed to qualify for a mortgage. Thinking About Re-mortaging? Read These Tips First More and more of use are signing up for limited time low interest rate mortgages and then switching to a different mortgage when the low interest period expires.It's a great way to save money and can, potentially, save you thousands in repayments. Home Loans for Credit Challenged Borrowers Just because you have negative items on your credit report doesn't mean you can't obtain a home mortgage loan. There are options for you. Home Owner Loans Explained How To Release Equity Locked Up In Your Home For Immediate Use.Free up the monetary worth tied up in your property by asking your financial advisor for information on a secured home owner loan. Home Mortgage Loans - Fixed Rate, Adjustable or Balloon, Which One Is Right For You? When you're shopping for a new home-especially for the first time-all the terms and expressions may be confusing and difficult to understand. Adjustable rate, fixed rate, balloon payment - how do you decide which is the right type of home mortgage for you if you're not even sure what each of them are?The name of the mortgage type usually has to do with how you'll pay for your loan - how the interest on the loan is being determined by the bank. Obtaining a Home Equity Loan Online Private lenders, banks, and mortgage companies are all setting up shop on the internet, and all make it possible to obtain a home equity loan online. Competition between lenders is stiff, so be sure to check a few companies that offer applications about their rates, products, and customer service. How Much Interest is Your Home Equity Earning? How much interest are you earning on your home equity? If you answered nothing, zero, zilch, zip you are correct. What would you do if you could get triple compounding on your equity? Would you take action and build a fortune that would allow you to pay off the mortgage and create a retirement fund?We use a strategy called Early Mortgage Pay Off System or EMPOS?. Home Loans and Mortgages - Time to Consolidate Loans? Home equity loans and lines of credit are useful tools for homeowners. They allow the homeowner to borrow against the value of his or her home for all kinds of purposes - home improvement, debt consolidation, vacations, and more. Home Equity Loan - A Reverse Mortgage Could Provide a Comfortable Retirement! While only comprising about 1% of all mortgages, the reverse mortgage has gained in popularity in recent years. Federally insured since the late 1980's, the reverse mortgage allows owners of paid-off homes to borrow against the equity in their homes in the form of a lump sum, a line of credit, or in the form of monthly payments. Mortgage Soup Looking for home mortgage loans can get confusing with the alphabet soup of mortgage loans programs available today. Most of these programs are just variations of fixed rate and adjustable rate mortgage loans. A Guide to Finding Cheap Homeowner Loans If you're actively looking for cheap homeowner loans, there are several things that you should take into consideration to make sure that you get the best loan for your money.Before taking one of the loans offered to you, you should take the time to understand how cheap homeowner loans work, make sure that you've explored all of your loan options, and shop around for the best loan rate that you're eligible for. Composite Credit Report Score Simplifies Mortgage Issues Do you want a mortgage loan for your new home? Trying to qualify for a new mortgage can be very tough, especially if you aren't aware of the effect your credit report score has on your ability to get approved for loans. One of the first things a lender looks at to determine your suitability for a mortgage loan is your credit report, or FICO score. A Qualified Mortgage Consultant Can Help Boost Credit Scores Consumers interested in purchasing or refinancing a home will pay an interest rate based on current market conditions and their ability to pay back the loan. The borrower's income and debt ratios are taken into consideration by the lender, as well as the predictability factor provided by credit scoring. Understand a Real Estate Appraisal Happy New Year. Make a difference this year. What is a Repayment Mortgage? A repayment mortgage is the type of mortgage that most people think about. The idea behind a repayment mortgage is that you pay monthly for a set period and each payment consists of an element of capital and interest.
|
| home | site map |
| © 2006 |
