What is a Self-Employed Mortgage?Written by John Mussi
Self-employed mortgages, as term implies are mortgages designed for those that are self-employed. Traditionally it's been more difficult for self-employed to get mortgages.Mortgage lenders preferred to see regular income guaranteed by employment. However this has changed in recent years. There are now mortgage lenders who specialise in self-employed market. If you are self-employed or unable to prove your income, it can be difficult finding a suitable mortgage. There are a number of reasons why it is often more difficult for those in such situations, main ones are that income of person tends to fluctuate, and they are unable to prove their income like those regularly employed who can produce payslips. Self-employed people may experience a problem finding a mortgage. Those in standard full-time employment are basically guaranteed to be paid, and can get references from their employer as well as be able to show their payslips therefore proving their income. Mortgage lenders like this as it cuts down their risks. If you are self-employed or working on a short-term contract, you could be financially solvent, and able to keep up payments easily, but that doesn't make it easy for you to prove that you will keep up payments to your mortgage lender. They want to know that that you will be able to keep up payments for a full term, usually 25 years, not just over next year. If you have no proof of income because you are self-employed and do not have three years worth of accounts it is unlikely that any high street mortgage lender will offer you a mortgage.
| | What is a Fixed Rate Mortgage?Written by John Mussi
As term implies, with a fixed rate mortgage mortgage rate is fixed for a set period of time, so no matter what movements occur in lender's standard variable mortgage rate, borrower's arrangement is fixed and, therefore, so are monthly fixed rate mortgage payments. A fixed rate mortgage would suit someone who likes to know where they stand. A fixed rate mortgage, as suggested by name, is a mortgage where equal repayments are made every month. Fixed rate mortgages allow you to easily manage and plan your monthly expenditure - because payment will be same every month and you won't be affected by any rises in base rate. If interest rates rise above fixed rate on your mortgage, you will see real benefits of fixed rate mortgage. A fixed rate mortgage makes it easy to plan ahead, because as name suggests, interest rate on your mortgage stays fixed. This means that as a fixed rate mortgage customer, even if Bank of England Base Rate changes, interest rate on your mortgage remains constant over a fixed period of time. This makes your budgeting easier, because you can plan ahead knowing exactly how much your monthly repayments will be. The fixed rate period can be anything between six months and five years, but it's always best to refer to a financial services professional before deciding what period of fixed interest rate to choose.
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