Archive for the 'Mortgage' Category
Saturday 8 August 2009 @ 7:44 pm
Donny Kemble asked:
The best flexible mortgage UK is the one that works with the needs of the individual borrower. Flexible mortgages are home loans that allow some deviation from their repayment schedule and allow underpayments, overpayments, repayment holidays and interest charged on a frequent basis. This article will look at each aspect of a flexible mortgage and highlight what makes the best flexible mortgage UK deal.
Overpayments
The vast majority of flexible mortgage borrowers make overpayments on their mortgages. The earlier that you make the extra payments in your mortgage term, the earlier your mortgage will be paid off. Even by making slightly higher monthly repayments will enable you to repay your mortgage loan quicker. For example, on a £70,000 mortgage charged at 6.2%, giving up your weekly large latte at £2.80 and putting that money towards your mortgage instead, would pay off the mortgage 1 year and 5 months early!
Some flexible mortgage lenders state a minimum overpayment of £25 per month and a maximum overpayment of 10% of the outstanding balance on completion.
Overpayments can also be made by lump sum payments on an ad hoc basis.
The best flexible mortgage UK is one that allows you to overpay at any time without penalty.
Underpayments
Underpayments can occur when you have made some overpayments. The underpayment option of a flexible mortgage is useful if, for example, your finances have become stretched. You can then choose to underpay for a few months until your finances have settled down.
The best flexible mortgage UK deal allows underpayments straightaway.
Payment Holiday
Some flexible mortgage deals allow you to take a complete break from making mortgage payments for up to a year. This could be useful if you’re thinking of starting a family or taking a sabbatical. You have to have built up sufficient overpayments to cover the period you take off and some mortgage lenders may only let you take a couple of month’s payment holiday each year
The best flexible mortgage UK deal allows you to have payment holidays for up to a year.
Borrowing Back
Borrowing back overpayments, instead of taking out a loan, makes sense if you need extra cash for any reason. You often have to build up a reserve of overpayments against which you can borrow and there will probably be a ceiling on the overall amount you can borrow through your original mortgage. The great aspect of mortgage overpayments is that rather than putting any spare cash into a saving account and earning a small rate of interest, the amount you overpay is taken off your mortgage so you are effectively earning the mortgage rate on your savings.
Some flexible mortgage lenders let you withdraw overpaid money directly using a cheque book or a debit card and others let you borrow money as the value of your property increases.
The best flexible mortgage UK deal allows easy access to funds.
Interest Charges
Unlike some traditional mortgages that still charge mortgage interest on an annual basis, flexible mortgages are calculated on a monthly or daily basis. This means that any overpayments you make are quickly credited against your loan, so you are immediately paying interest on a smaller amount of debt, thereby saving you money in interest charges.
The best flexible mortgage UK deal calculates interest on a daily basis.
Conclusion
The modern mortgage market has become more liberal and creative, and therefore this has led to an increase in the choice and range of flexible mortgage packages being offered to borrowers. Due to so many flexible mortgages to choose from, an independent mortgage broker can advise you on the best flexible mortgage UK deal for your needs.
The best flexible mortgage UK is the one that works with the needs of the individual borrower. Flexible mortgages are home loans that allow some deviation from their repayment schedule and allow underpayments, overpayments, repayment holidays and interest charged on a frequent basis. This article will look at each aspect of a flexible mortgage and highlight what makes the best flexible mortgage UK deal.
Overpayments
The vast majority of flexible mortgage borrowers make overpayments on their mortgages. The earlier that you make the extra payments in your mortgage term, the earlier your mortgage will be paid off. Even by making slightly higher monthly repayments will enable you to repay your mortgage loan quicker. For example, on a £70,000 mortgage charged at 6.2%, giving up your weekly large latte at £2.80 and putting that money towards your mortgage instead, would pay off the mortgage 1 year and 5 months early!
Some flexible mortgage lenders state a minimum overpayment of £25 per month and a maximum overpayment of 10% of the outstanding balance on completion.
Overpayments can also be made by lump sum payments on an ad hoc basis.
The best flexible mortgage UK is one that allows you to overpay at any time without penalty.
Underpayments
Underpayments can occur when you have made some overpayments. The underpayment option of a flexible mortgage is useful if, for example, your finances have become stretched. You can then choose to underpay for a few months until your finances have settled down.
The best flexible mortgage UK deal allows underpayments straightaway.
Payment Holiday
Some flexible mortgage deals allow you to take a complete break from making mortgage payments for up to a year. This could be useful if you’re thinking of starting a family or taking a sabbatical. You have to have built up sufficient overpayments to cover the period you take off and some mortgage lenders may only let you take a couple of month’s payment holiday each year
The best flexible mortgage UK deal allows you to have payment holidays for up to a year.
Borrowing Back
Borrowing back overpayments, instead of taking out a loan, makes sense if you need extra cash for any reason. You often have to build up a reserve of overpayments against which you can borrow and there will probably be a ceiling on the overall amount you can borrow through your original mortgage. The great aspect of mortgage overpayments is that rather than putting any spare cash into a saving account and earning a small rate of interest, the amount you overpay is taken off your mortgage so you are effectively earning the mortgage rate on your savings.
Some flexible mortgage lenders let you withdraw overpaid money directly using a cheque book or a debit card and others let you borrow money as the value of your property increases.
The best flexible mortgage UK deal allows easy access to funds.
Interest Charges
Unlike some traditional mortgages that still charge mortgage interest on an annual basis, flexible mortgages are calculated on a monthly or daily basis. This means that any overpayments you make are quickly credited against your loan, so you are immediately paying interest on a smaller amount of debt, thereby saving you money in interest charges.
The best flexible mortgage UK deal calculates interest on a daily basis.
Conclusion
The modern mortgage market has become more liberal and creative, and therefore this has led to an increase in the choice and range of flexible mortgage packages being offered to borrowers. Due to so many flexible mortgages to choose from, an independent mortgage broker can advise you on the best flexible mortgage UK deal for your needs.
Saturday 8 August 2009 @ 6:53 pm
Ben Schmitt asked:
We all know that putting extra payments down on your mortgage is going to pay off your mortgage faster and save you money. But what not everyone knows are the little insider tips that allow you to know to the penny, EXACTLY, when to use them to pay off your mortgage, how much to make them in, and exactly what you’ll save as a result.
See, it’s really NOT about how many you make, or how often, or even how much you make them in. When you’re trying to pay off your mortgage faster their is only one thing that matters.
Timing.
You see mortgages are structured pretty creatively. Mortgage companies tell you that you’re only paying the 5-7% rate, but they never explain what that really means. Our mortgage payments are almost completely wasted on interest at the beginning of our mortgage. This is what makes it so difficult to pay off your mortgage.
What it means is that a $4000 payment may only $250 of principle. The entire rest of that payment goes to PURE INTEREST. It’s basically burning a hole in your pocket when it should go to pay your mortgage off.
Now, here’s how to beat it. If you make a $250 principle payment on its own… right before you make the $4000 payment then guess what? You just completed that entire payment without wasting $3750 on interest. You moves you amortization down the line to pay off your mortgage. Sure, you’ll still have to make a $4000 payment, but you pay your mortgage off $3750 earlier and it only cost you $250! That’s how banks think.
If you could get $3750 for every $250 you put in, how many times would you do it? As many as you good and you wouldn’t just pay your mortgage off, it’d evaporate.
If this doesn’t quite make sense yet then grab a copy of your amortization schedule or The Mortgage Loophole Report and analyze how they’ll pay off your mortgage. You’ll see.
So…
Catch #1 – If you make a small prepayment at the beginning of the term, you’d pay off your mortgage MUCH earlier than you would by making a bigger principle payment at the end of your mortgage.
When you put the money in at the end you don’t even pay your mortgage off as fast or save near the amount of interest because most of your payment is going to principle anyway. As you pay off your mortgage they weaken. Your mortgage pay off time literally depends on this.
So, the secret to pay off your mortgage is to understand the way a mortgage amortization has been structures to accommodate certain methods to pay off your mortgage.
Catch #2 – Although you probably realize that this information is important to pay off your mortgage you probably won’t be able to apply it the the extent that you wish you could. Honestly, if you had all the extra cash to pay off your mortgage with, then you’d have made a bigger down payment on your home. It’s not until most of us have already been trying to pay off our mortgage that we start to get the extra cash to put towards the pay off.
There is a solution.
There is a “mortgage loophole” that home owners are finally realizing and using to pay off their mortgage. It truly is a revolution in the mortgage industry to help people pay off their mortgage. Don’t expect your local bank to tell you about it. They not only don’t want you to pay off your mortgage early but they haven’t been spreading the news among their mortgage brokers.
Anyway, I’d better stop upsetting banks with this insider information. Hopefully you can apply this information to pay off your mortgage immediately before your mortgage begins to amortize.
Also, if you truly want the keys to pay off your mortgage lightening fast and save big bucks, then grab your free copy of The Mortgage Loop Hole Report.
We all know that putting extra payments down on your mortgage is going to pay off your mortgage faster and save you money. But what not everyone knows are the little insider tips that allow you to know to the penny, EXACTLY, when to use them to pay off your mortgage, how much to make them in, and exactly what you’ll save as a result.
See, it’s really NOT about how many you make, or how often, or even how much you make them in. When you’re trying to pay off your mortgage faster their is only one thing that matters.
Timing.
You see mortgages are structured pretty creatively. Mortgage companies tell you that you’re only paying the 5-7% rate, but they never explain what that really means. Our mortgage payments are almost completely wasted on interest at the beginning of our mortgage. This is what makes it so difficult to pay off your mortgage.
What it means is that a $4000 payment may only $250 of principle. The entire rest of that payment goes to PURE INTEREST. It’s basically burning a hole in your pocket when it should go to pay your mortgage off.
Now, here’s how to beat it. If you make a $250 principle payment on its own… right before you make the $4000 payment then guess what? You just completed that entire payment without wasting $3750 on interest. You moves you amortization down the line to pay off your mortgage. Sure, you’ll still have to make a $4000 payment, but you pay your mortgage off $3750 earlier and it only cost you $250! That’s how banks think.
If you could get $3750 for every $250 you put in, how many times would you do it? As many as you good and you wouldn’t just pay your mortgage off, it’d evaporate.
If this doesn’t quite make sense yet then grab a copy of your amortization schedule or The Mortgage Loophole Report and analyze how they’ll pay off your mortgage. You’ll see.
So…
Catch #1 – If you make a small prepayment at the beginning of the term, you’d pay off your mortgage MUCH earlier than you would by making a bigger principle payment at the end of your mortgage.
When you put the money in at the end you don’t even pay your mortgage off as fast or save near the amount of interest because most of your payment is going to principle anyway. As you pay off your mortgage they weaken. Your mortgage pay off time literally depends on this.
So, the secret to pay off your mortgage is to understand the way a mortgage amortization has been structures to accommodate certain methods to pay off your mortgage.
Catch #2 – Although you probably realize that this information is important to pay off your mortgage you probably won’t be able to apply it the the extent that you wish you could. Honestly, if you had all the extra cash to pay off your mortgage with, then you’d have made a bigger down payment on your home. It’s not until most of us have already been trying to pay off our mortgage that we start to get the extra cash to put towards the pay off.
There is a solution.
There is a “mortgage loophole” that home owners are finally realizing and using to pay off their mortgage. It truly is a revolution in the mortgage industry to help people pay off their mortgage. Don’t expect your local bank to tell you about it. They not only don’t want you to pay off your mortgage early but they haven’t been spreading the news among their mortgage brokers.
Anyway, I’d better stop upsetting banks with this insider information. Hopefully you can apply this information to pay off your mortgage immediately before your mortgage begins to amortize.
Also, if you truly want the keys to pay off your mortgage lightening fast and save big bucks, then grab your free copy of The Mortgage Loop Hole Report.
Saturday 8 August 2009 @ 5:17 pm
Dale Stouffer asked:
With the onset of 2008 we have seen mortgage interest rates begin to fall. When mortgage rates fall, misleading mortgage advertising schemes seem to show up in the media all around us. For example, I recently watched an advertisement on Television for “The Real No Cost Mortgage”. I shudder each time I see or hear advertising about this type of mortgage because it is misleading and deceptive. The sadness in this for me as a 12 year mortgage broker veteran is that this type of advertising is indicative the bad apples that contributed to a great degree to the mortgage industry meltdown in 2007. I am going to say it right off the bat: There Are No “No Cost Mortgages” on the Planet!” Is this clear? All mortgages have costs associated with them. This is the end of the story.
Most “no cost mortgage” loan programs are designed the same way: the interest rate of your loan is increased to cover the costs associated with your mortgage. There are a select few mortgages that have very little costs associated with them: these are home equity lines of credit – or HELOCS. Often you can get these little or no cost loans at your local credit union or small community bank. Additionally, these loans typically only allow you borrow up to about 90% of your home’s value. Credit Unions are small enough that they perhaps can offer to pay some of your costs as a courtesy to earn your business. The larger banks simply cannot pay or give you these costs for free or it would set them back a few dollars.
With these small second mortgages and HELOCS aside, the rest of the mortgage market is primarily made up of larger first mortgages. As I previously stated, these mortgages have costs associated with them such as: paying a processor to process your loan, the cost for an appraisal, the underwriter, the title insurance policy, your credit report, tax and insurance escrows, and of course the money that your loan officer makes in commission. All of these fees in one form or another get paid, and guess who pays them? That’s right, you do. You will pay these fees one way or another.
So what is the catch to this type of advertising? As I previous pointed out, the mortgage company charges you a higher interest rate. If you are paying a higher interest rate, then your monthly payment is higher. So your higher payment month after month pays your closing costs over time. Now, this is not necessarily a bad thing if you know what you are getting into. Where I have a beef with this type of advertising is that it is not telling you the whole truth. You do have closing costs and the mortgage company is charging you a higher interest rate to compensate for those fees – and they do not tell you this in the advertising. They lead you down some fantasy of a no cost mortgage, or a free mortgage, and ultimately charge you a higher interest rate than you would normally get if you paid your costs either with your loan proceeds in a refinance or out of your pocket in a purchase mortgage. The misleading advertising got you to call them.
Initially, this loan can be good if you are low on cash. Hey, it is not a bad loan in the short term. Let’s just say that the interest rate that they charge you increases your monthly payment $150 a month for a no cost mortgage. After 30 months, or 2.5 years you have paid $4,500 extra. What if that was the amount of your closing costs when you first got the deal? Well, for the first 30 months you saved money and were better off. However, once you hit month 31, you are now paying more for your mortgage’s closing costs than you would have if you had paid them up front when you got the mortgage.
Another thing to be careful about with this type of mortgage is that it is very easy for a mortgage company to charge you more than might have been able to charge you because their profit is made in the interest rate and in the slightly higher interest rates. With this said, it is hard to tell how much a mortgage company makes on your loan given your payment increases slightly over what you could have been paying if you had paid your own closing costs.
So, the next time you hear of this kind of mortgage program, make sure you ask about the difference in your monthly payment between paying your own closing costs, or for paying a higher interest rate. If you know you are only going to be in the home for a few years and then you are going to sell the home, then a no closing cost mortgage might good for you. If you are planning on staying longer and you know you are going to refinance in the near future, then this loan might be good for you too. But, if you do not want to refinance in the future, or be forced to have to refinance to get out of a no cost mortgage when it starts costing you money then the no cost mortgage probably is not right for you. Make sure you take a look at all your options. Do not let a slick mortgage person tell you that this loan saves you money – as this is not necessarily the case.
For mortgage home loan, real estate financing, and credit information
With the onset of 2008 we have seen mortgage interest rates begin to fall. When mortgage rates fall, misleading mortgage advertising schemes seem to show up in the media all around us. For example, I recently watched an advertisement on Television for “The Real No Cost Mortgage”. I shudder each time I see or hear advertising about this type of mortgage because it is misleading and deceptive. The sadness in this for me as a 12 year mortgage broker veteran is that this type of advertising is indicative the bad apples that contributed to a great degree to the mortgage industry meltdown in 2007. I am going to say it right off the bat: There Are No “No Cost Mortgages” on the Planet!” Is this clear? All mortgages have costs associated with them. This is the end of the story.
Most “no cost mortgage” loan programs are designed the same way: the interest rate of your loan is increased to cover the costs associated with your mortgage. There are a select few mortgages that have very little costs associated with them: these are home equity lines of credit – or HELOCS. Often you can get these little or no cost loans at your local credit union or small community bank. Additionally, these loans typically only allow you borrow up to about 90% of your home’s value. Credit Unions are small enough that they perhaps can offer to pay some of your costs as a courtesy to earn your business. The larger banks simply cannot pay or give you these costs for free or it would set them back a few dollars.
With these small second mortgages and HELOCS aside, the rest of the mortgage market is primarily made up of larger first mortgages. As I previously stated, these mortgages have costs associated with them such as: paying a processor to process your loan, the cost for an appraisal, the underwriter, the title insurance policy, your credit report, tax and insurance escrows, and of course the money that your loan officer makes in commission. All of these fees in one form or another get paid, and guess who pays them? That’s right, you do. You will pay these fees one way or another.
So what is the catch to this type of advertising? As I previous pointed out, the mortgage company charges you a higher interest rate. If you are paying a higher interest rate, then your monthly payment is higher. So your higher payment month after month pays your closing costs over time. Now, this is not necessarily a bad thing if you know what you are getting into. Where I have a beef with this type of advertising is that it is not telling you the whole truth. You do have closing costs and the mortgage company is charging you a higher interest rate to compensate for those fees – and they do not tell you this in the advertising. They lead you down some fantasy of a no cost mortgage, or a free mortgage, and ultimately charge you a higher interest rate than you would normally get if you paid your costs either with your loan proceeds in a refinance or out of your pocket in a purchase mortgage. The misleading advertising got you to call them.
Initially, this loan can be good if you are low on cash. Hey, it is not a bad loan in the short term. Let’s just say that the interest rate that they charge you increases your monthly payment $150 a month for a no cost mortgage. After 30 months, or 2.5 years you have paid $4,500 extra. What if that was the amount of your closing costs when you first got the deal? Well, for the first 30 months you saved money and were better off. However, once you hit month 31, you are now paying more for your mortgage’s closing costs than you would have if you had paid them up front when you got the mortgage.
Another thing to be careful about with this type of mortgage is that it is very easy for a mortgage company to charge you more than might have been able to charge you because their profit is made in the interest rate and in the slightly higher interest rates. With this said, it is hard to tell how much a mortgage company makes on your loan given your payment increases slightly over what you could have been paying if you had paid your own closing costs.
So, the next time you hear of this kind of mortgage program, make sure you ask about the difference in your monthly payment between paying your own closing costs, or for paying a higher interest rate. If you know you are only going to be in the home for a few years and then you are going to sell the home, then a no closing cost mortgage might good for you. If you are planning on staying longer and you know you are going to refinance in the near future, then this loan might be good for you too. But, if you do not want to refinance in the future, or be forced to have to refinance to get out of a no cost mortgage when it starts costing you money then the no cost mortgage probably is not right for you. Make sure you take a look at all your options. Do not let a slick mortgage person tell you that this loan saves you money – as this is not necessarily the case.
For mortgage home loan, real estate financing, and credit information
Saturday 8 August 2009 @ 5:13 pm
Huseyin Gunay asked:
With the new mortgage bill that became effective on March 2007, banks in Turkey started to ofer a variety of mortgage products to their customers, tailored to each individual’s needs. These products and the rates differ widely from bank to bank when you include loan duration, down payment, commission fees, prepayment options and fees etc. All of these variables make decision making much more confusing to the customer. In addition, when you add foreign currency based lending, different closing costs for each bank, expertise fees, etc, choosing the best mortgage product suitable for the customer turns into a multivariate optimization problem. Therefore, the role of the mortgage broker becomes critical. To better assist his clients and find the best mortgage product and the rate, a broker must have many years of experience in their fields, in finance, and in real estate business. In addition, it is vital that a mortgage broker must be equipped with the top of the line financial calculators and mortgage software, and access to up-to-date rates and products offered by banks.
Mortgage types being offered in Turkey can be classified as follows:
1. Fixed Rate Mortgages:
This is the most common mortgage type offered and given by all of the banks. The loan duration and the monthly payments are fixed and thus do not change through out the life of the mortgage. The borrower can payoff the entire loan with a prepayment option, however there is an early closing fee, which could be up to 2% of the loan amount.
2. Variable Rate Mortgages:
This type of mortgage is based on a variable rate specified by the bank and the federal bank and changes with the rate changes in the markets. Borrowers should pay attention to setting a ceiling rate when negotiating with the bank so that when the rates change their payments do not go above a certain rate. The early closing fee that exists in fixed rate mortgage does not exist in this type of mortgage.
3. All Inclusive Mortgage:
If the borrower wants to include all the fees associated with the purchase of his home and the mortgage in the mortgage, this type of mortgage would be the most ideal one. These fees are are realtor commision, life and porperty insurance premiums, disaster insurance, moving fees, closing fees, expertise fees, etc. The amoun of these fees depend on the property and the lender. However, all of these fees could be included in the mortgage and be bundled as the mortgage package.
4. Discounted Commision based Mortgage:
If the borrower is interested in low monthly payments, he/she then can choose to pay a commision up front which consists of a percentage of the interest that needs to be paid. After subtracting this amount from the loan, the monthly payments would be lower. These types of mortgages have higher closing fees than other types, however. The early closing fee aplies to this mortgage as well.
5. Mortgage with payments specified at different months:
If the borrower is interested in making payments on only certain months, then this type of mortgage would be the most ideal one.
6. Zero Down Mortgage:
For those who has another property, this property can be used as a collateral to finance the purchase of the next property. If the other property has a higher value, then the collateral could cover the entire mortgage of the new house, thus making it a zero down mortgage payment. One thing that the borrowers should pay attention to is that most banks give mortgages up to 80% of the value of the property.
7. Foreign Currency Indexed Mortgage:
In addition to mortgages given in YTL (New Turkish Lira) currency, banks started to give out mortgage loans in other currencies as well. Some of these currencies are USD, EUR, GBP, CHF, and JPY. These types of foreign currency indexed mortgages can be obtained both as fixed rate and variable rate mortgages.
8. Refinance Mortgage:
The refinance option is now available as well. In case borrowers are interested in refinancing their mortgages with lower interest rates, they can change the mortgage either through the bank that they obtained the mortgage of through any other lender. The only caviat in applying for refinance in Turkey is that if your mortgage was applied prior to March 6th 2007, there will not be an early closing fee. However, if it started after that date, then there will be an early closing or early prepayment fee applied which could be up to 2% of the loan amount. The borrower also needs to pay for all associated fees related to the new mortgage.
9. Home Equity or Personal Loan Mortgage:
If the borrower is in need of additional finances, he/she can choose to get a loan by using his/her property as a collateral. This loan could be applied to home improvement as well as any other personal need. They are usually given at a higher interest rate than other types of loans but less than regular personal loans.
With the new mortgage bill that became effective on March 2007, banks in Turkey started to ofer a variety of mortgage products to their customers, tailored to each individual’s needs. These products and the rates differ widely from bank to bank when you include loan duration, down payment, commission fees, prepayment options and fees etc. All of these variables make decision making much more confusing to the customer. In addition, when you add foreign currency based lending, different closing costs for each bank, expertise fees, etc, choosing the best mortgage product suitable for the customer turns into a multivariate optimization problem. Therefore, the role of the mortgage broker becomes critical. To better assist his clients and find the best mortgage product and the rate, a broker must have many years of experience in their fields, in finance, and in real estate business. In addition, it is vital that a mortgage broker must be equipped with the top of the line financial calculators and mortgage software, and access to up-to-date rates and products offered by banks.
Mortgage types being offered in Turkey can be classified as follows:
1. Fixed Rate Mortgages:
This is the most common mortgage type offered and given by all of the banks. The loan duration and the monthly payments are fixed and thus do not change through out the life of the mortgage. The borrower can payoff the entire loan with a prepayment option, however there is an early closing fee, which could be up to 2% of the loan amount.
2. Variable Rate Mortgages:
This type of mortgage is based on a variable rate specified by the bank and the federal bank and changes with the rate changes in the markets. Borrowers should pay attention to setting a ceiling rate when negotiating with the bank so that when the rates change their payments do not go above a certain rate. The early closing fee that exists in fixed rate mortgage does not exist in this type of mortgage.
3. All Inclusive Mortgage:
If the borrower wants to include all the fees associated with the purchase of his home and the mortgage in the mortgage, this type of mortgage would be the most ideal one. These fees are are realtor commision, life and porperty insurance premiums, disaster insurance, moving fees, closing fees, expertise fees, etc. The amoun of these fees depend on the property and the lender. However, all of these fees could be included in the mortgage and be bundled as the mortgage package.
4. Discounted Commision based Mortgage:
If the borrower is interested in low monthly payments, he/she then can choose to pay a commision up front which consists of a percentage of the interest that needs to be paid. After subtracting this amount from the loan, the monthly payments would be lower. These types of mortgages have higher closing fees than other types, however. The early closing fee aplies to this mortgage as well.
5. Mortgage with payments specified at different months:
If the borrower is interested in making payments on only certain months, then this type of mortgage would be the most ideal one.
6. Zero Down Mortgage:
For those who has another property, this property can be used as a collateral to finance the purchase of the next property. If the other property has a higher value, then the collateral could cover the entire mortgage of the new house, thus making it a zero down mortgage payment. One thing that the borrowers should pay attention to is that most banks give mortgages up to 80% of the value of the property.
7. Foreign Currency Indexed Mortgage:
In addition to mortgages given in YTL (New Turkish Lira) currency, banks started to give out mortgage loans in other currencies as well. Some of these currencies are USD, EUR, GBP, CHF, and JPY. These types of foreign currency indexed mortgages can be obtained both as fixed rate and variable rate mortgages.
8. Refinance Mortgage:
The refinance option is now available as well. In case borrowers are interested in refinancing their mortgages with lower interest rates, they can change the mortgage either through the bank that they obtained the mortgage of through any other lender. The only caviat in applying for refinance in Turkey is that if your mortgage was applied prior to March 6th 2007, there will not be an early closing fee. However, if it started after that date, then there will be an early closing or early prepayment fee applied which could be up to 2% of the loan amount. The borrower also needs to pay for all associated fees related to the new mortgage.
9. Home Equity or Personal Loan Mortgage:
If the borrower is in need of additional finances, he/she can choose to get a loan by using his/her property as a collateral. This loan could be applied to home improvement as well as any other personal need. They are usually given at a higher interest rate than other types of loans but less than regular personal loans.
Saturday 8 August 2009 @ 5:01 pm
Jason Jones asked:
If you are looking to buy your own home you need to get a mortgage to finance the deal. A mortgage is a type of loan that is usually spread over 25 years, although shorter and longer term mortgages are available. This loan then is repaid in monthly instalments which are arranged by whoever a person takes their mortgage out with. The house is yours as soon as you have your mortgage in place, however once your final instalment has been paid you will then get the deeds to your house. This means that you legally own the house outright.
Why are there so many types of mortgages?
There are various types of mortgages such as repayment, interest only, endowments and bad credit mortgages. Depending on your circumstances you will get a mortgage to suit yourself. There is no right or wrong mortgage and what is good for one person is bad for another, it is down to the individual to decide what is the best for them.
Different types of mortgages
There are many different kinds of mortgages and here are some of them on the market..
• 100% mortgage – these are mortgages where the lender gives the borrower the entire amount of the house, this is good if you have no money to put down. As well as 100% mortgages there are also 75%, 80% and 90% ones. The plus points of a 100% mortgage is that you don’t need to provide a deposit, however as you are borrowing 100% of the cost of the house you may find that the repayment term is longer and the payments are higher.
• Capped – this is where the monthly mortgage amount is capped at a certain price. If the interest goes above this price you will still only pay the capped amount, and if it falls you pay less. A capped mortgage is a very good if you want to know exactly how much you will be paying for your mortgage each month. However, there are not many lenders who will offer this type of mortgage.
• Endowment mortgages – this type of mortgage pays off the interest on the loan and is supposed to pay out a lump sum at the end of the loan period which should be enough to pay off the outstanding balance. Unfortunately this rarely happens and as a result these are not very popular today.
• Repayment mortgages – these are one of the most popular kinds of mortgage. With a repayment mortgage the interest and capital is paid off with a person’s monthly mortgage payments. This means that at the end of the loan the house being mortgaged will belong to the person who has taken out the mortgage. Repayment mortgages are ideal if you want to pay off your mortgage in full within a given timescale. Payments on these however can be higher than other mortgages.
• Bad credit, or sub prime mortgages – if a person has a bad credit score such mortgages may be their only option. Sub prime mortgages are becoming more commonplace today as the number of people with a bad credit score is increasing. Plus points for bad credit or sub prime mortgages are that they enable people who may have had a difficult time financially get on the property ladder. As a result though the payments will be high and so will the interest rate as borrowers are classed as being a risk. If the payments are made on time it is possible after a while to switch to a better mortgage.
With so many types of mortgages available it really is wise to do as much research into them as possible before opting for any particular one.
If you are looking to buy your own home you need to get a mortgage to finance the deal. A mortgage is a type of loan that is usually spread over 25 years, although shorter and longer term mortgages are available. This loan then is repaid in monthly instalments which are arranged by whoever a person takes their mortgage out with. The house is yours as soon as you have your mortgage in place, however once your final instalment has been paid you will then get the deeds to your house. This means that you legally own the house outright.
Why are there so many types of mortgages?
There are various types of mortgages such as repayment, interest only, endowments and bad credit mortgages. Depending on your circumstances you will get a mortgage to suit yourself. There is no right or wrong mortgage and what is good for one person is bad for another, it is down to the individual to decide what is the best for them.
Different types of mortgages
There are many different kinds of mortgages and here are some of them on the market..
• 100% mortgage – these are mortgages where the lender gives the borrower the entire amount of the house, this is good if you have no money to put down. As well as 100% mortgages there are also 75%, 80% and 90% ones. The plus points of a 100% mortgage is that you don’t need to provide a deposit, however as you are borrowing 100% of the cost of the house you may find that the repayment term is longer and the payments are higher.
• Capped – this is where the monthly mortgage amount is capped at a certain price. If the interest goes above this price you will still only pay the capped amount, and if it falls you pay less. A capped mortgage is a very good if you want to know exactly how much you will be paying for your mortgage each month. However, there are not many lenders who will offer this type of mortgage.
• Endowment mortgages – this type of mortgage pays off the interest on the loan and is supposed to pay out a lump sum at the end of the loan period which should be enough to pay off the outstanding balance. Unfortunately this rarely happens and as a result these are not very popular today.
• Repayment mortgages – these are one of the most popular kinds of mortgage. With a repayment mortgage the interest and capital is paid off with a person’s monthly mortgage payments. This means that at the end of the loan the house being mortgaged will belong to the person who has taken out the mortgage. Repayment mortgages are ideal if you want to pay off your mortgage in full within a given timescale. Payments on these however can be higher than other mortgages.
• Bad credit, or sub prime mortgages – if a person has a bad credit score such mortgages may be their only option. Sub prime mortgages are becoming more commonplace today as the number of people with a bad credit score is increasing. Plus points for bad credit or sub prime mortgages are that they enable people who may have had a difficult time financially get on the property ladder. As a result though the payments will be high and so will the interest rate as borrowers are classed as being a risk. If the payments are made on time it is possible after a while to switch to a better mortgage.
With so many types of mortgages available it really is wise to do as much research into them as possible before opting for any particular one.
Saturday 8 August 2009 @ 4:52 pm
Donny Kemble asked:
Finding the best offset mortgage deal can be challenging. There is a huge amount of information on the internet and on the high street about offset mortgages, but instead of giving you clarity, it can leave you overwhelmed and confused as to which is the best offset mortgage deal on the market.
What is an offset mortgage?
Offset mortgages link the balances in a borrower’s mortgage account and/or savings account. Interest earnt from the savings and/or current accounts is used against the mortgage debt and in theory; the mortgage can be paid off quicker. An offset mortgage is also flexible and allows overpayments, underpayments, and sometimes payment holidays.
The concept of an offset mortgage is very different from a standard type mortgage and you can’t just compare interest rates to find the best offset mortgage deal. Offset mortgages come in a variety of shapes and sizes that can suit your particular needs and circumstances. Therefore, you need to look at an offset mortgage deal as a whole before you decide which is the best offset mortgage deal for you. The Council of Mortgage Lenders (CML) said in 2006, approximately 170,000 offset mortgages were sold, which was worth £23.9 billion.
Many households looking for a new mortgage deal would be better off with an offset mortgage, yet they account for a minority of the market – about 7%. Most householders tend to settle with what they know, i.e. a traditional type of mortgage, because many people find it hard to understand the potential benefits that an offset mortgage could offer, such as yearly savings, flexibility, and tax benefits.
An independent mortgage broker
To help you choose the best offset mortgage deal for you, it is advisable to seek assistance from trained personnel who give impartial advice, such as an independent mortgage broker. Like any financial service in the UK, an independent body called the Financial Services Association (FSA) regulates them. The FSA applies the Principles of Business to companies, for example, Principle 6 states all customers must be treated fairly, and Principle 7 states information provided must be clear, fair and not be misleading. Therefore, you can rely on independent mortgage advisors to help you find the best offset mortgage deal.
Research by the CML showed that the majority of offset mortgages are sold through intermediaries. By the end of last year, intermediaries accounted for 60% of all offset mortgages sold, compared to 45% in April 2005.
Different types of offset mortgages
Since the first offset mortgage was introduced into the UK in 1997, the number of offset mortgage lenders has increased five-fold over the last decade, and the number and range of offset mortgages has increased to about 250 offset products. For example, the buy-to-let offset mortgage lets borrowers pay in their rental income into their savings/current accounts to offset the outstanding mortgage balance. There are offset mortgages suitable for people with irregular income, such as the self-employed, commission based employees, and first-time buyers.
Offset products are often associated with people moving home and remortgagers, who are slightly older and higher income individuals. However, offset mortgages are now suitable for some younger first-time homebuyers. These include the ‘family offset’ that allows the borrower’s family and/or friends to use their saving balances to offset the borrower’s mortgage debts.
In conclusion
Offset mortgages are growing in popularity and they are being described as a ‘lifestyle tool’ that can help mortgage borrowers maintain control of their finances. An independent mortgage broker can provide invaluable advice in helping you choose the best offset mortgage deal for you.
Finding the best offset mortgage deal can be challenging. There is a huge amount of information on the internet and on the high street about offset mortgages, but instead of giving you clarity, it can leave you overwhelmed and confused as to which is the best offset mortgage deal on the market.
What is an offset mortgage?
Offset mortgages link the balances in a borrower’s mortgage account and/or savings account. Interest earnt from the savings and/or current accounts is used against the mortgage debt and in theory; the mortgage can be paid off quicker. An offset mortgage is also flexible and allows overpayments, underpayments, and sometimes payment holidays.
The concept of an offset mortgage is very different from a standard type mortgage and you can’t just compare interest rates to find the best offset mortgage deal. Offset mortgages come in a variety of shapes and sizes that can suit your particular needs and circumstances. Therefore, you need to look at an offset mortgage deal as a whole before you decide which is the best offset mortgage deal for you. The Council of Mortgage Lenders (CML) said in 2006, approximately 170,000 offset mortgages were sold, which was worth £23.9 billion.
Many households looking for a new mortgage deal would be better off with an offset mortgage, yet they account for a minority of the market – about 7%. Most householders tend to settle with what they know, i.e. a traditional type of mortgage, because many people find it hard to understand the potential benefits that an offset mortgage could offer, such as yearly savings, flexibility, and tax benefits.
An independent mortgage broker
To help you choose the best offset mortgage deal for you, it is advisable to seek assistance from trained personnel who give impartial advice, such as an independent mortgage broker. Like any financial service in the UK, an independent body called the Financial Services Association (FSA) regulates them. The FSA applies the Principles of Business to companies, for example, Principle 6 states all customers must be treated fairly, and Principle 7 states information provided must be clear, fair and not be misleading. Therefore, you can rely on independent mortgage advisors to help you find the best offset mortgage deal.
Research by the CML showed that the majority of offset mortgages are sold through intermediaries. By the end of last year, intermediaries accounted for 60% of all offset mortgages sold, compared to 45% in April 2005.
Different types of offset mortgages
Since the first offset mortgage was introduced into the UK in 1997, the number of offset mortgage lenders has increased five-fold over the last decade, and the number and range of offset mortgages has increased to about 250 offset products. For example, the buy-to-let offset mortgage lets borrowers pay in their rental income into their savings/current accounts to offset the outstanding mortgage balance. There are offset mortgages suitable for people with irregular income, such as the self-employed, commission based employees, and first-time buyers.
Offset products are often associated with people moving home and remortgagers, who are slightly older and higher income individuals. However, offset mortgages are now suitable for some younger first-time homebuyers. These include the ‘family offset’ that allows the borrower’s family and/or friends to use their saving balances to offset the borrower’s mortgage debts.
In conclusion
Offset mortgages are growing in popularity and they are being described as a ‘lifestyle tool’ that can help mortgage borrowers maintain control of their finances. An independent mortgage broker can provide invaluable advice in helping you choose the best offset mortgage deal for you.
Saturday 8 August 2009 @ 2:16 pm
Bobbie Carle asked:
Offset mortgage providers are increasing in number, and it is predicted that offset mortgages will account for 30% of all UK secured lending by 2009.
What are offset mortgages?
Offset mortgages allow homeowners to link the balance on a savings and current account with their mortgage, while still allowing instant access to their money. The amount in the savings and current account is calculated on a monthly or daily basis and used to reduce or ‘offset’ the interest payments due on the mortgage. For example: your mortgage might be £200,000, but you have £20,000 in your savings account and £3,000 in your current account. This means you will only pay interest on £177,000.
Choosing the best offset mortgage
There are over 30 offset mortgage providers in the UK market and about 250 offset products in the market – but with so many to choose from, how do you choose the best offset mortgage deal for you?
You could traipse up and down the high street visiting all the banks and building societies, and obtain the latest information on their offset mortgages. Or you could save your shoe leather and consult an independent mortgage broker. They will calculate whether an offset mortgage is suitable for you. They have the latest deals from offset mortgage providers at their fingertips, and they will help clarify which is the best offset mortgage deal for you, as each lender is different. For example: two offset mortgage providers offer different deals on a mortgage of £150,000. One offers a two- year fixed rate at 5.29% and the other one offers a two-year fixed rate at 6.33%. On face value the offset mortgage provider offering 5.29% looks the better deal, however the fee for the mortgage is 2.5% of the loan value which totals £4,249. The fee on the 6.33% deal is £99. A borrower opting for the 5.29% offset mortgage deal would pay £1,430 more than the 6.33% borrower.
Who could benefit from an offset mortgage?
Self-employed people: the self-employed are often paid without any tax deduction. They save their money over the year in preparation of their tax bill and an offset mortgage offers them a handy way to obtain maximum benefit from their money, but still have it available when the tax bill is due. A Regulated Mortgage Survey (RMS) revealed 21% of offset borrowers in 2006 were self-employed, compared to 16% of non-offset borrowers. For the self-employed some offset mortgage providers combine their self cert products with offset features.
Savers: A general guide is about 10% of the value of the mortgage in savings. However in some cases, savers only need about 5% of the mortgage debt in savings to make the offset deal worthwhile.
Higher-rate taxpayers: Higher-rate tax payers lose 40% of any interest earnt on savings accounts to the taxman. With an offset mortgage no interest is paid on accounts linked to an offset, so there isn’t any tax to pay. Some offset mortgage providers allow ISAs to be linked to an offset mortgage. Although savers do not receive any interest, they avoid forfeiting their right to save up to £3,000 in an ISA per year. Once the mortgage has been paid for, then they start receiving interest on the ISA. Some borrowers have managed a 0% mortgage because they have enough in their ISAs, savings and current account, to offset their whole mortgage.
Conclusion
Offset mortgages are increasing in popularity as more borrowers recognize the benefits an offset mortgage offers them. More offset mortgage providers are entering the market, which is good for the borrower as it offers more choice, however, without the advice from an independent mortgage broker, it can be difficult to choose the best offset mortgage deal.
Offset mortgage providers are increasing in number, and it is predicted that offset mortgages will account for 30% of all UK secured lending by 2009.
What are offset mortgages?
Offset mortgages allow homeowners to link the balance on a savings and current account with their mortgage, while still allowing instant access to their money. The amount in the savings and current account is calculated on a monthly or daily basis and used to reduce or ‘offset’ the interest payments due on the mortgage. For example: your mortgage might be £200,000, but you have £20,000 in your savings account and £3,000 in your current account. This means you will only pay interest on £177,000.
Choosing the best offset mortgage
There are over 30 offset mortgage providers in the UK market and about 250 offset products in the market – but with so many to choose from, how do you choose the best offset mortgage deal for you?
You could traipse up and down the high street visiting all the banks and building societies, and obtain the latest information on their offset mortgages. Or you could save your shoe leather and consult an independent mortgage broker. They will calculate whether an offset mortgage is suitable for you. They have the latest deals from offset mortgage providers at their fingertips, and they will help clarify which is the best offset mortgage deal for you, as each lender is different. For example: two offset mortgage providers offer different deals on a mortgage of £150,000. One offers a two- year fixed rate at 5.29% and the other one offers a two-year fixed rate at 6.33%. On face value the offset mortgage provider offering 5.29% looks the better deal, however the fee for the mortgage is 2.5% of the loan value which totals £4,249. The fee on the 6.33% deal is £99. A borrower opting for the 5.29% offset mortgage deal would pay £1,430 more than the 6.33% borrower.
Who could benefit from an offset mortgage?
Self-employed people: the self-employed are often paid without any tax deduction. They save their money over the year in preparation of their tax bill and an offset mortgage offers them a handy way to obtain maximum benefit from their money, but still have it available when the tax bill is due. A Regulated Mortgage Survey (RMS) revealed 21% of offset borrowers in 2006 were self-employed, compared to 16% of non-offset borrowers. For the self-employed some offset mortgage providers combine their self cert products with offset features.
Savers: A general guide is about 10% of the value of the mortgage in savings. However in some cases, savers only need about 5% of the mortgage debt in savings to make the offset deal worthwhile.
Higher-rate taxpayers: Higher-rate tax payers lose 40% of any interest earnt on savings accounts to the taxman. With an offset mortgage no interest is paid on accounts linked to an offset, so there isn’t any tax to pay. Some offset mortgage providers allow ISAs to be linked to an offset mortgage. Although savers do not receive any interest, they avoid forfeiting their right to save up to £3,000 in an ISA per year. Once the mortgage has been paid for, then they start receiving interest on the ISA. Some borrowers have managed a 0% mortgage because they have enough in their ISAs, savings and current account, to offset their whole mortgage.
Conclusion
Offset mortgages are increasing in popularity as more borrowers recognize the benefits an offset mortgage offers them. More offset mortgage providers are entering the market, which is good for the borrower as it offers more choice, however, without the advice from an independent mortgage broker, it can be difficult to choose the best offset mortgage deal.
Saturday 8 August 2009 @ 12:13 pm
Nick Riviera asked:
Despite recent turmoil in financial markets, and trouble for the UK’s fifth largest mortgage provider Northern Rock, there is no shortage of companies offering mortgage quotes. One of the questions you will often be asked when you’re at the cashiers in the bank is whether you’ve got a mortgage, followed by when your mortgage is up for renewal and if you would be interested in a quote for a mortgage. There are over 8,000 mortgage products in the market, so you’ll never be left wanting for mortgage quotes.
Companies claim to and try to make the mortgage and re-mortgage process as easy as possible. Mortgage advisors can compare more than 8500 mortgage products from ALL UK lenders to provide you with mortgage quotes. If you go online you will very quickly be able to request a free, no obligation, quote, either by choosing a mortgage from a selection of market leading mortgages, by completing a form or by calling a ‘hotline’ number.
Mortgage advisors are able to search the whole of the UK mortgage market to find a mortgage which will suit your needs, all without obligation. Doing this yourself would be time-consuming almost to the point of impossibility, and approaching easy-to-reach high street lenders is not always the route to the best route available. Getting a number of mortgage quotes will enable you to choose the best rate for you. Using forms on some website will give you access to several mortgage quotes instantly and for the completion of only one form – a great time saver that will enable you spend time comparing the different mortgage quotes, rather than spending time and effort on actually obtaining a number of mortgage quotes.
Things to look for when receiving mortgage quotes go beyond the headline interest rate. While you are obviously keen to get as low an interest rate as possible, you need to look for the fees that come attached. These usually include a mortgage arrangement fee (which can be as high as nearly £2,000), how long your low deal lasts, what are the exit penalties if you wish you pay off all or part of your mortgage before the end of the term, is there any commission attached that will go to the broker; what other fees are there? All these may make a low interest rate deal actually cost more in the long run.
When looking for mortgage quotes you will often see best mortgage tables. These are free to use and easily accessible, but may not be quite what they seem because different tables use different criteria to order the mortgages.
So, although you can compare the mortgage deals of the UK’s top mortgage lenders in minutes, you may still be confused. It is better to get a number of mortgage quotes for your personal circumstances. To do this it is probably best to consult a mortgage broker or mortgage advisor who will talk to you about your own financial situation, your requirements, both long and short term, and come up with a number of sensible mortgage quotes just for you.
Despite recent turmoil in financial markets, and trouble for the UK’s fifth largest mortgage provider Northern Rock, there is no shortage of companies offering mortgage quotes. One of the questions you will often be asked when you’re at the cashiers in the bank is whether you’ve got a mortgage, followed by when your mortgage is up for renewal and if you would be interested in a quote for a mortgage. There are over 8,000 mortgage products in the market, so you’ll never be left wanting for mortgage quotes.
Companies claim to and try to make the mortgage and re-mortgage process as easy as possible. Mortgage advisors can compare more than 8500 mortgage products from ALL UK lenders to provide you with mortgage quotes. If you go online you will very quickly be able to request a free, no obligation, quote, either by choosing a mortgage from a selection of market leading mortgages, by completing a form or by calling a ‘hotline’ number.
Mortgage advisors are able to search the whole of the UK mortgage market to find a mortgage which will suit your needs, all without obligation. Doing this yourself would be time-consuming almost to the point of impossibility, and approaching easy-to-reach high street lenders is not always the route to the best route available. Getting a number of mortgage quotes will enable you to choose the best rate for you. Using forms on some website will give you access to several mortgage quotes instantly and for the completion of only one form – a great time saver that will enable you spend time comparing the different mortgage quotes, rather than spending time and effort on actually obtaining a number of mortgage quotes.
Things to look for when receiving mortgage quotes go beyond the headline interest rate. While you are obviously keen to get as low an interest rate as possible, you need to look for the fees that come attached. These usually include a mortgage arrangement fee (which can be as high as nearly £2,000), how long your low deal lasts, what are the exit penalties if you wish you pay off all or part of your mortgage before the end of the term, is there any commission attached that will go to the broker; what other fees are there? All these may make a low interest rate deal actually cost more in the long run.
When looking for mortgage quotes you will often see best mortgage tables. These are free to use and easily accessible, but may not be quite what they seem because different tables use different criteria to order the mortgages.
So, although you can compare the mortgage deals of the UK’s top mortgage lenders in minutes, you may still be confused. It is better to get a number of mortgage quotes for your personal circumstances. To do this it is probably best to consult a mortgage broker or mortgage advisor who will talk to you about your own financial situation, your requirements, both long and short term, and come up with a number of sensible mortgage quotes just for you.
Saturday 8 August 2009 @ 11:18 am
search rankpros asked:
Applying for a mortgage can be a very stressful time for a person and it is important that you choose the best mortgage deal for you. Without research into what is on offer you could find yourself opting for a deal that is not right for you and your circumstances. Mortgages are a loan that is used in order to buy a house and the borrower makes regular monthly payments to pay off the loan amount, until eventually the full amount is paid and the house belongs outright to the borrower.
If you are looking to apply for a mortgage and are unsure of where to get information on the best mortgage deals around look no further than Go Direct. Here you will find online tools to help you come to an informed decision about the type, size and term of your mortgage.
Many people assume that all mortgage are the same, but they are not and this is why it is so important to find the best mortgage deals. After all why apply for a mortgage that does not suit your financial situation and could leave you out of pocket? If you are unsure as to how to even begin searching for the best mortgage deals then you have come to the right place.
There are so many mortgages available right now all with different repayment terms and conditions, interest rates and offers such as cash back when you apply for them, so you do need to have an overview of what are the best mortgage deals. Here is a brief rundown of the kind of mortgages you can expect to choose from:
• Variable rate mortgages – these are linked to the interest rate and will go up and down as the interest rate does. These are a good idea if you would like to pay less for your mortgage when the interest rate is low – however, be warned if the interest rate goes up so does your mortgage payment and you need to be able to make your repayments or your home could be at risk.
• Fixed rate mortgages – these are the opposite of variable rate mortgages as the repayment amount is fixed. This fixed amount is often higher than the variable rate amount but borrowers have the peace of mind of knowing how much their mortgage payment is every month.
• Interest only mortgage – these are mortgages where the borrow only pays off the interest on the amount borrowed. Although it can seem like a good idea and can be cheaper than some of the other mortgages around in the long run you will only be paying the interest and not the equity in the property.
• 100% mortgages – these are mortgages for 100% of the property’s value and were popular up until recently. However mortgage companies are now cutting down on the number of 100% mortgages that they offer.
• Joint ownership – these are mortgages where a housing company or local council own half of the house and the borrower owns the other half. Then repayments are split between the other owner and the mortgage company. This type of mortgage is good if you can only afford to borrow a small amount.
• Buy to let – these are mortgages on properties that the owner intends to rent out and they work slightly differently to a ‘standard’ mortgage.
If you are looking for the best mortgage deals the best place to check out is Go Direct who have the tools and advisors on hand to steer you through the minefield of choosing a mortgage that is right for you.
Applying for a mortgage can be a very stressful time for a person and it is important that you choose the best mortgage deal for you. Without research into what is on offer you could find yourself opting for a deal that is not right for you and your circumstances. Mortgages are a loan that is used in order to buy a house and the borrower makes regular monthly payments to pay off the loan amount, until eventually the full amount is paid and the house belongs outright to the borrower.
If you are looking to apply for a mortgage and are unsure of where to get information on the best mortgage deals around look no further than Go Direct. Here you will find online tools to help you come to an informed decision about the type, size and term of your mortgage.
Many people assume that all mortgage are the same, but they are not and this is why it is so important to find the best mortgage deals. After all why apply for a mortgage that does not suit your financial situation and could leave you out of pocket? If you are unsure as to how to even begin searching for the best mortgage deals then you have come to the right place.
There are so many mortgages available right now all with different repayment terms and conditions, interest rates and offers such as cash back when you apply for them, so you do need to have an overview of what are the best mortgage deals. Here is a brief rundown of the kind of mortgages you can expect to choose from:
• Variable rate mortgages – these are linked to the interest rate and will go up and down as the interest rate does. These are a good idea if you would like to pay less for your mortgage when the interest rate is low – however, be warned if the interest rate goes up so does your mortgage payment and you need to be able to make your repayments or your home could be at risk.
• Fixed rate mortgages – these are the opposite of variable rate mortgages as the repayment amount is fixed. This fixed amount is often higher than the variable rate amount but borrowers have the peace of mind of knowing how much their mortgage payment is every month.
• Interest only mortgage – these are mortgages where the borrow only pays off the interest on the amount borrowed. Although it can seem like a good idea and can be cheaper than some of the other mortgages around in the long run you will only be paying the interest and not the equity in the property.
• 100% mortgages – these are mortgages for 100% of the property’s value and were popular up until recently. However mortgage companies are now cutting down on the number of 100% mortgages that they offer.
• Joint ownership – these are mortgages where a housing company or local council own half of the house and the borrower owns the other half. Then repayments are split between the other owner and the mortgage company. This type of mortgage is good if you can only afford to borrow a small amount.
• Buy to let – these are mortgages on properties that the owner intends to rent out and they work slightly differently to a ‘standard’ mortgage.
If you are looking for the best mortgage deals the best place to check out is Go Direct who have the tools and advisors on hand to steer you through the minefield of choosing a mortgage that is right for you.
Saturday 8 August 2009 @ 10:19 am
Estelle Jones asked:
An offset mortgage comparison is not as straightforward as it would first seem. This article will give an overview of an offset mortgage and discuss how to compare offset mortgages to help you find the right one.
Offset mortgages are fairly new to the UK market place. They were introduced to the UK in the late 1990s and originated from Australia. They were seen as a niche product, but this has changed since interest rates have decreased and the market has opened up. The principle of offset mortgages is relatively simple – when a borrower takes out an offset mortgage, it is linked to their savings and/or current account. This allows the borrower to offset their mortgage debt against the money in their accounts, thus reducing the amount of interest owed. For example, if a borrower has a £250,000 mortgage and £50,000 in savings, interest will only be charged on the difference, i.e. £200,000.
The range of offset mortgages within the market place has increased in recent years and consequently, offset mortgages have becoming increasing complex. For an offset mortgage comparison, you can’t just compare the Annual Percentage Rate (APR) as you would with a traditional type of mortgage. The APR has limited value with an offset mortgage because nothing else is taken into account, such as the flexibility of the account, set-up charges, and Early Redemption Charges (ERC).
To obtain an offset mortgage comparison, it is important to look at the key aspects of an offset mortgage and to ask yourself – ‘what can my offset mortgage do for me?’ Key aspects include:
Flexibility of the account
Overpayments – are you likely to make frequent overpayments into your mortgage account? If so, you will want an offset mortgage that does not penalise for frequent overpayments or penalise you for paying off your mortgage early.
Underpayments and/or payment holidays – do you want a career break with underpayments or payment holidays from your mortgage? Not all offset mortgages offer underpayments or payment holidays, whereas some types of offset mortgage offer the service, but you usually have to make a certain amount of overpayments before you are eligible.
Credit limit – will you need a lump sum of cash in the future, for example, home renovations? Some offset mortgages allow a credit limit on top of the agreed mortgage, depending on the amount of equity in the property, which acts as a loan facility.
Debt – are you carrying credit debt and personal loans? Some offset mortgages allow the debt to be incorporated into the mortgage package, possibly leading to a lower repayment rate. The debts can also remain unsecured.
Number of accounts – can you add more than one savings/current account to your mortgage? Do you have family members that are willing to link their bank accounts to your mortgage debt? If so, you can further reduce your interest payments.
Charges and interest rates
At first glance, an offset mortgage with an initial low APR for two years and low arrangement fees may look appealing, but if it has an ERC and no underpayment facilities, it would not be suitable if you wanted to make frequent overpayments to pay your mortgage off early, but were planning to have a career break in the future.
There are many lenders in the mortgage market that offer different types of offset mortgages. To guide you through the intricacies of an offset mortgage comparison it would be best to seek advice. An independent mortgage broker can advise you and help you with an offset mortgage comparison to ensure you can have the best offset mortgage for your needs.
An offset mortgage comparison is not as straightforward as it would first seem. This article will give an overview of an offset mortgage and discuss how to compare offset mortgages to help you find the right one.
Offset mortgages are fairly new to the UK market place. They were introduced to the UK in the late 1990s and originated from Australia. They were seen as a niche product, but this has changed since interest rates have decreased and the market has opened up. The principle of offset mortgages is relatively simple – when a borrower takes out an offset mortgage, it is linked to their savings and/or current account. This allows the borrower to offset their mortgage debt against the money in their accounts, thus reducing the amount of interest owed. For example, if a borrower has a £250,000 mortgage and £50,000 in savings, interest will only be charged on the difference, i.e. £200,000.
The range of offset mortgages within the market place has increased in recent years and consequently, offset mortgages have becoming increasing complex. For an offset mortgage comparison, you can’t just compare the Annual Percentage Rate (APR) as you would with a traditional type of mortgage. The APR has limited value with an offset mortgage because nothing else is taken into account, such as the flexibility of the account, set-up charges, and Early Redemption Charges (ERC).
To obtain an offset mortgage comparison, it is important to look at the key aspects of an offset mortgage and to ask yourself – ‘what can my offset mortgage do for me?’ Key aspects include:
Flexibility of the account
Overpayments – are you likely to make frequent overpayments into your mortgage account? If so, you will want an offset mortgage that does not penalise for frequent overpayments or penalise you for paying off your mortgage early.
Underpayments and/or payment holidays – do you want a career break with underpayments or payment holidays from your mortgage? Not all offset mortgages offer underpayments or payment holidays, whereas some types of offset mortgage offer the service, but you usually have to make a certain amount of overpayments before you are eligible.
Credit limit – will you need a lump sum of cash in the future, for example, home renovations? Some offset mortgages allow a credit limit on top of the agreed mortgage, depending on the amount of equity in the property, which acts as a loan facility.
Debt – are you carrying credit debt and personal loans? Some offset mortgages allow the debt to be incorporated into the mortgage package, possibly leading to a lower repayment rate. The debts can also remain unsecured.
Number of accounts – can you add more than one savings/current account to your mortgage? Do you have family members that are willing to link their bank accounts to your mortgage debt? If so, you can further reduce your interest payments.
Charges and interest rates
At first glance, an offset mortgage with an initial low APR for two years and low arrangement fees may look appealing, but if it has an ERC and no underpayment facilities, it would not be suitable if you wanted to make frequent overpayments to pay your mortgage off early, but were planning to have a career break in the future.
There are many lenders in the mortgage market that offer different types of offset mortgages. To guide you through the intricacies of an offset mortgage comparison it would be best to seek advice. An independent mortgage broker can advise you and help you with an offset mortgage comparison to ensure you can have the best offset mortgage for your needs.
Saturday 8 August 2009 @ 8:12 am
Elizabethgrant asked:
It’s important that you understand and feel comfortable with how you choose to pay back your mortgage, either on a repayment or interest only basis. What is mortgage repayment? Mortgage repayment refers to the process of repaying a loan taken out to buy a property. Who will need to make mortgage repayments? Mortgage repayments will be necessary for anyone who does not have the cash to buy a property outright. However, there are a number of different ways of tackling mortgage repayments. Some may be better for you than others, but this will depend on your circumstances and the risks you wish to take.
It’s very important that you don’t ignore any payment problems. Mortgages are ‘priority debts’, which you should pay off first as your lender could repossess your home and sell it to get their money. Especially it’s very important if you have bad credit mortgage. Bear in mind that once you have had a sub prime mortgage or adverse credit mortgage for three years and have managed to meet the repayments on this each month, you will have written yourself a new credit history.
One of the key issues with bad credit mortgages is how you are going to pay it back. There are several aspects to this question, depending on how stable your finances are. One of the early decisions when taking out a bad credit rating mortgage is whether you are going to go for interest only repayment or capital and interest repayment. Each method has its advantages for your bad credit rating mortgage. You will need to think about how you want to structure the mortgage repayment of the capital debt. Do you wish to take out a conventional repayment mortgage, or back your mortgage with an ISA or endowment policy or pension plan? Alternatively you may wish to simply pay the lender the interest on the mortgage with a view to repaying the debt at some time in the future either from your own resources or maybe from the sale of the property.
Let’s start discussion with repayment mortgages, where the money you pay each month covers both capital and interest repayments. Part of your monthly payment covers the interest due each month and part goes towards repaying the capital. This usually means that by the end of the agreed term, the mortgage has been paid off completely. The longer your term, the lower your monthly payments will be, but you will pay more interest overall.
There are two main advantages to the borrower when taking out a repayment mortgage:
a) the guarantee that if all payments are made on time the mortgage will have been discharged by the end of the term. b) the borrower can see the mortgage liability diminishing each year. The main disadvantages of a repayment mortgage are listed below: a) during the early years of the mortgage most of the monthly payment is interest. b) the average person moves house approximately 6 times and after each move has to start a new mortgage, therefore restarting the same process of paying mainly interest in the early years.
Other mortgage repayment option is interest-only mortgages, where your monthly payments to Nationwide only cover the interest that’s being charged on your mortgage. You pay only the interest each month. The actual amount borrowed doesn’t reduce during the life of the mortgage so you need to repay the full capital amount at the end of the mortgage term. Your monthly payments are less than with a repayment mortgage, but you will need to ensure that you have the money available at the end of the term to repay the capital. If you cannot repay the loan at the end of the term, you will have to carry on making interest payments to C&G.
Also you can make a combination of repayment and interest-only mortgages. It is very useful if you manage to land a flexible mortgage deal for your bad credit rating mortgage. A flexible mortgage deal will allow you to take advantage of fluctuating finances by overpaying and underpaying when it is appropriate to do so.
It’s important that you understand and feel comfortable with how you choose to pay back your mortgage, either on a repayment or interest only basis. What is mortgage repayment? Mortgage repayment refers to the process of repaying a loan taken out to buy a property. Who will need to make mortgage repayments? Mortgage repayments will be necessary for anyone who does not have the cash to buy a property outright. However, there are a number of different ways of tackling mortgage repayments. Some may be better for you than others, but this will depend on your circumstances and the risks you wish to take.
It’s very important that you don’t ignore any payment problems. Mortgages are ‘priority debts’, which you should pay off first as your lender could repossess your home and sell it to get their money. Especially it’s very important if you have bad credit mortgage. Bear in mind that once you have had a sub prime mortgage or adverse credit mortgage for three years and have managed to meet the repayments on this each month, you will have written yourself a new credit history.
One of the key issues with bad credit mortgages is how you are going to pay it back. There are several aspects to this question, depending on how stable your finances are. One of the early decisions when taking out a bad credit rating mortgage is whether you are going to go for interest only repayment or capital and interest repayment. Each method has its advantages for your bad credit rating mortgage. You will need to think about how you want to structure the mortgage repayment of the capital debt. Do you wish to take out a conventional repayment mortgage, or back your mortgage with an ISA or endowment policy or pension plan? Alternatively you may wish to simply pay the lender the interest on the mortgage with a view to repaying the debt at some time in the future either from your own resources or maybe from the sale of the property.
Let’s start discussion with repayment mortgages, where the money you pay each month covers both capital and interest repayments. Part of your monthly payment covers the interest due each month and part goes towards repaying the capital. This usually means that by the end of the agreed term, the mortgage has been paid off completely. The longer your term, the lower your monthly payments will be, but you will pay more interest overall.
There are two main advantages to the borrower when taking out a repayment mortgage:
a) the guarantee that if all payments are made on time the mortgage will have been discharged by the end of the term. b) the borrower can see the mortgage liability diminishing each year. The main disadvantages of a repayment mortgage are listed below: a) during the early years of the mortgage most of the monthly payment is interest. b) the average person moves house approximately 6 times and after each move has to start a new mortgage, therefore restarting the same process of paying mainly interest in the early years.
Other mortgage repayment option is interest-only mortgages, where your monthly payments to Nationwide only cover the interest that’s being charged on your mortgage. You pay only the interest each month. The actual amount borrowed doesn’t reduce during the life of the mortgage so you need to repay the full capital amount at the end of the mortgage term. Your monthly payments are less than with a repayment mortgage, but you will need to ensure that you have the money available at the end of the term to repay the capital. If you cannot repay the loan at the end of the term, you will have to carry on making interest payments to C&G.
Also you can make a combination of repayment and interest-only mortgages. It is very useful if you manage to land a flexible mortgage deal for your bad credit rating mortgage. A flexible mortgage deal will allow you to take advantage of fluctuating finances by overpaying and underpaying when it is appropriate to do so.
