Types of Mortgages

Written by John Mussi


Continued from page 1

Fixed mortgages

With a fixed rate, your payments stayrepparttar same no matter what happens torepparttar 141939 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. Onrepparttar 141940 other hand, a rise in rates will leave you paying less than people on other schemes.

Tracker mortgages

This type of mortgage followsrepparttar 141941 Bank of England base rate. It will usually stay a set margin aboverepparttar 141942 base rate forrepparttar 141943 duration ofrepparttar 141944 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 eitherrepparttar 141945 capped rate orrepparttar 141946 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 inrepparttar 141947 account is also used to offset againstrepparttar 141948 amount you owe onrepparttar 141949 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 withdrawrepparttar 141950 extra cash if you need it later. And if you haverepparttar 141951 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 providedrepparttar 141952 author's biography remains intact:

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the www.directonlineloans.co.uk website.


What is a Mortgage?

Written by John Mussi


Continued from page 1

Each joint borrower is individually liable forrepparttar amount ofrepparttar 141938 loan and interest due torepparttar 141939 lender and is always responsible forrepparttar 141940 full amount outstanding. Events such as separation, divorce, unemployment, long term sickness, injury or disability could ultimately cause a house to be sold andrepparttar 141941 mortgage to be terminated. The early repayment of a loan can have different financial consequences depending onrepparttar 141942 type of mortgage involved.

Most mortgage lenders also require you to have a suitable life assurance policy, which would repayrepparttar 141943 borrowing inrepparttar 141944 event of death or critical illness. This ensures that, in these distressing circumstances, your house would not have to be sold to repayrepparttar 141945 mortgage.

You may findrepparttar 141946 perfect mortgage for you at your local building society. But shopping around could land you with a much better deal or alternatively you can use a mortgage broker. Mortgage brokers scourrepparttar 141947 market to findrepparttar 141948 most suitable deal for you. A good mortgage broker can save you time and money.

If you are in full-time employmentrepparttar 141949 lender will ask for written evidence for example, payslips and your P60 forrepparttar 141950 past two years. They'll also probably write to your employer asking for confirmation.

If you're self-employed it more difficult to get a mortgage and as a result there are lenders who specialise inrepparttar 141951 self-employed. You would need to show three years audited accounts. If you haven't been in business long enough thenrepparttar 141952 lender should accept a letter of confirmation from your accountant.

You may freely reprint this article providedrepparttar 141953 author's biography remains intact:

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the www.directonlineloans.co.uk website.


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