 |
UK Mortages: A Guide Through The Maze
Types of UK Mortgages
You may be wasting your money with the wrong type of mortgage.
Knowledge is power.
There are essentially two different types of mortgage:
Repayment only, (capital and interest mortgage)
Interest only, (ISA, pension or endowment mortgage)
Repayment only
Your monthly repayments consist of repaying the capital amount
borrowed together with accrued interest. On your mortgage
statement, normally received annually, you will see that the
amount borrowed decreases throughout the term.
Advantages
At the end of the term, you are safe in the knowledge that the
total amount of the debt has been repaid.
Overpayments and lump sum payments into your mortgage account
can be made reducing both the interest and capital amounts
repayable.
Life assurance cover is not always necessary in taking out
this type of mortgage.
Disadvantages
There may be financial penalties for making lump
sum/overpayments into your mortgage account.
In the early years of a repayment mortgage the majority of the
monthly repayment is interest rather than capital. For borrowers
moving house regularly, this can result in little of the capital
being paid off.
If you have no life assurance cover in place and die before
the loan is repaid, the mortgage will still need to be repaid.
This may result in the property having to be sold to repay the
debt owed.
Interest only
With this type of mortgage, only the interest is paid off with
each mortgage payment. The borrower also takes out at the same
time, an alternative 'repayment vehicle' (method of paying off
the mortgage) such as an ISA, pension plan or endowment policy.
More information about endowments (which in the 1980's and 1990's
were extremely popular), ISAs and Pension plans are below. The
most important fact about an interest only mortgage is that the
monthly repayments do not repay any of the outstanding capital
balance. As a consequence it is important that the payments are
maintained into the repayment vehicle otherwise it will not be
possible to pay off the mortgage at the end of the term.
Endowment
ISA Plan
Pension
Endowment
The most common type of interest only mortgage which also
provides life assurance cover and a fixed payment for investment.
The fixed payments are based on the amount of the loan together
with the mortgage term and are designed so that, at maturity, the
amount invested and earnings are sufficient to pay off the
mortgage. Much maligned in the press because of the poorer
investment growth rates achieved in a low inflationary
environment this form of investment is less popular these days.
Note there is no guarantee that, when the endowment matures and
'pays out', the balance will be sufficient to repay the
mortgage.
ISA Plan
The Individual Savings Account (ISA) is a tax free method of
saving. Using an ISA as a repayment vehicle is growing in
popularity but due to the ISAs complexity it is only for the
financially sophisticated or borrowers taking advice from a
suitably qualified financial adviser.
Pension Plan
Life assurance cover is provided and monthly payments are made
into a pension fund. When the benefits are eventually taken, the
mortgage is repaid using tax-free cash from the remainder of the
fund. The plan holder can then draw a pension from the balance of
the fund. This product, which tends to be used by the self
employed, is only for those taking advice from a suitably
qualified financial adviser.
Discounted mortgages
Most of the discounted rates offer discounts over the first
one, two three, four or five years. The total amount of discount
on offer tends to work out approximately the same over the period
of the discount. The choice is yours between making a choice
between a large discount for a short period of time, a small
discount over a long period of time or something in between. For
example one product may offer a 3% discount over 2 years and
another a 2% discount over 3 years. The total discount you
receive in either case is 6% so the choice you are faced with is
what period to take the discount over.
Cash back mortgages
These deals vary but, as the name suggests, you get cash -as
well as the money you're going to be borrow for your home. You
may use it to pay for home improvements moving costs and
furniture etc.
Cash back deals are perhaps best seen as an incentive to go
with a particular lender. It's rarely a genuine gift and you will
find that you have extended ties. There is nothing free in the
mortgage market the lender will eventually make more than make
their money back.
Current account mortgages
It's becoming increasingly popular to combine a mortgage and a
current (banking & check) account. Its good news if you like
the option of making overpayments on your mortgage (e.g. if you
are self-employed or receive bonus payments). The other advantage
is that interest is calculated on a daily basis, so when you pay
money into your account, like your monthly wage, the overall loan
size is lowered, so reducing the total amount of interest
paid.
Base Rate Tracker Mortgage
These can get very complicated but in theory they're simply a
mortgage that follows the Bank of England base rate at an agreed
rate.
So you might have a Base Rate Tracker Mortgage which sets your
mortgage at 1% above the base rate for, say, the first two
years.
Non standard mortgages
If you have experienced financial difficulty in the past or
are unable to produce full proof of your income then you may find
that the main stream lenders are unable to help you. However, we
would recommend that you contact these lenders first as,
depending on the severity of your situation; you may find that
they are willing to help. If not, however, you will find that
there are lenders who specialise in this area of the market.
These lenders tend to charge higher interest rates or require
larger deposits. Once you have re established your credit you can
change to a standard mortgage.
Remortgage
You don't have to move home to move your mortgage. Many
homeowners move their mortgage to a different lender to save
money, or switch to a different mortgage with their current
lender.
You may want to remortgage to
Improve your home.
Save money If you're paying your lender's standard variable
rate (SVR), your existing lender - or another lender - may offer
better rates if you move to a different mortgage.
Raise money if you want to improve your home, or pay off other
borrowings, you may be able to increase your mortgage rather than
taking out a separate loan.
Nicholas Marr
Marr International Ltd
Visit our overseas website for Mortgages abroad,mortgage advice
and overseas property
http://www.homesgofast.com
Marr International is not registered under the UK financial
services act to give advice regarding mortgages. Our partners
specialising the different regions world wide for mortgage
advice.
 MORE RESOURCES updated Tue. February / 07 / 2012
|
Obama Unveils Mortgage Refinance EndeavorsMortgageorbby MortgageOrb.com on Wednesday 01 February 2012 The Obama administration has presented the mortgage refinancing plan that was first announced during the president's State of the Union speech on Jan. 24. According to a statement released by the White ...and more » |
|
AgedLeadStore.com to Add 1100000 Aged Mortgage Refinance LeadsMiddle East North Africa Financial NetworkCOM, January 26, 2012 ) Baltimore, MD AgedLeadStore.com is increasing its value for its customers by adding 1.1 million aged Mortgage Refinance Leads in February. This is important as many people depend upon their ability to refinance to make progress ... |
|
$11.94M Refinance for Northeast RBS Citizens Bank PortfolioCitybizlist Real EstateGreg Nalbandian, Senior Vice President and Managing Director of NorthMarq Capital's New Jersey Regional office, has arranged a first mortgage refinance totaling $11.94 million for a RBS Citizens Bank Portfolio of 16 RBS Citizens Bank branches in New ... |
|
Boehner On Refi Plan: Bad Idea, Obama!Mortgageorbby MortgageOrb.com on Thursday 02 February 2012 Any hope for bipartisan support of President Obama's mortgage refinance proposal was squashed by House Speaker John Boehner, who dismissed the new initiative as a continuation of failed policies.and more » |
|
Peek Inside: Sound Credit Union's Marketing DepartmentThe Financial BrandFirst, from a sheer results standpoint, we recently introduced a re-purposed home equity product as a no-fee, mortgage refinance option. The target audience was people who had about 15 years or less left on their mortgage, who wanted to take advantage ... |
Google News
|
|
|
RELATED MORTGAGE AND REFINANCING ARTICLES:
A Mortgage Loan For
Homes
Everybody wants to own a house because it is something that
portrays your success in life. Some people make some ways
on how to own one by considering a lot of things including
borrowing money from banks, lending offices and finance
institutions.
Where To Find The Best
Rates For Your Mortgage?
As with all of my articles this will be based on a scenario
in my home town. (Which may be similar to yours).
How to Utilize Your Cash
Investment in Your Home
Have you ever noticed how hard it can be to get to the
equity in your home?Recently I had a client come to my
office who had quite a bit of equity in their home. I'm not
talking about $50,000 or even $200k, I'm talking about over
$250k.
Home Mortgage Lenders -
How to Find A Good Mortgage Broker Online
Mortgage lenders have set up shop online, but they aren't
all reputable mortgage brokers. To find a good mortgage
lender you need to compare rates and research to find
reputable companies.
A Guide to Selecting a
Mortgage Broker in Australia
Once you have made the decision to buy a home you will need
to obtain mortgage financing for your purchase. Until about
fifteen years ago buyers had to go directly to banks to
obtain loans and shopping around for the right fit was a
long process.
Securing the Best
International Mortgage for Your Home in Spain
Are you one of a growing number of people planning on
buying a holiday home in Spain? Or have you decided to
expatriate, buy a Spanish home and live in it
permanently? If so, you may be about to begin your hunt for
an international mortgage to purchase real estate
abroad? The task of finding the best international mortgage
can seem like quite a daunting one at first glance with
many domestic, overseas and international providers vying
for your business. But don't panic! Tackle the task head
on, ensure you secure yourself the best possible
international mortgage or property finance deal today and
you will save yourself tens of thousands in interest
payments over the lifetime of your mortgage.
No Money Down Mortgage
Loans - Ways To Get Approved For a Home Loan Online With
Zero Down
No money down mortgage loans enabled more people to own
their own home. The following ways will help you get
approved for a home loan online with zero down.
Understanding UK Bridging
Finance
Bridging finance, also referred to as "bridge loans" and
"bridging loans", have nothing at all to do with
re-constructing the London Bridge. Bridging finance is
typically a short-term loan that a business uses to supply
cash for a real estate transaction until permanent
financing can be arranged.
5 Steps to Getting on
Top of your Mortgage
Getting on top of your mortgage so you can pay your loan
off faster and potentially save thousands of dollars on
your home loan is possible with a plan and consistent
effort. There are mortgage reduction strategies that you
can put into place that will ensure that your loan is paid
off more quickly without putting a huge strain on your
current budget.
California Refinance -
Refinancing in California
The real estate market in California is booming. Home
values continue to appreciate almost on a daily basis.
Home Equity Line of
Credit or Second Mortgage Loan Online - Things To Do With
Your Homes Equity
If you are wanting to get a home equity loan, rates are
still low enough that you may want to make use of that
equity in your home. Do you need some ideas on what you
could do to multiply your equity or make some extra money
off of the capital that could be available to you? Here are
some suggestions of ways to put the equity to good use when
you go to take out a home equity or cash out refinance
loan.
Refinance Your Home
Mortgage Online
The largest financial obligation most people ever take on
couldn't escape the reach of the Internet. Home mortgage
loans originated online comprise an integral part of one of
the largest and most profitable aspects of the banking
industry.
Buy to Let
Mortgages
Finding the right buy to let mortgage is crucial to your
success as a property investor. Unlike other forms of
property investment, a lot of the capital you invest into a
buy to let investment property is likely to be borrowed.
Refinance Your
House
If you have seen all the advertisements regarding
refinancing your house you may be wondering if refinancing
can actually save you money. The answer is yes! Interest
rates are at the lowest levels in decades and there has
never been a better time to refinance your home.
The Worst Way to Shop
for a Home Mortgage
You've found a house that is perfect for you. It is so
appealing that you're willing to endure the hassle of
obtaining a mortgage.
Zero Down Payment
Mortgage - Can It Be Done?
"I've been renting for years now; I've always paid my rent
on time. I'll start a savings account soon, so I can buy a
house": sound familiar? How much is in that savings account
now? Just as I thought, not enough, you went on vacation,
found a car you had to have, or WOW; look at the flat panel
T.
Bad Credit Home
Financing - Buy a House Even With Poor Credit
Sub prime lenders come in two groups: reasonable and
unreasonable. Reasonable sub prime lenders offer mortgage
financing to high risk borrowers with slightly increased
rates and fees.
Buy To Let Mortgages -
To Let in Reasonable Capital Growth with Financial
Obligation
Every individual needs a home and every home needs an
owner. Perhaps you are already a homeowner.
First Time Buyers Fail
To Shop Around
Almost two thirds of first time buyers accept the first
mortgage they are offered and fail to shop around, often
missing out on better deals. Many first time buyers feel
pressurized by their estate agents into quickly organizing
a mortgage for fear of losing out on a property or are
attracted to a low interest rate without looking at the
mortgage deal as a whole.
PayDay Loan Online -
Quick Cash Advance Loans Online Are Very
Convenient
Getting a quick cash loan, cash advance or payday loan has
never been easier than it is today, thanks to the internet.
Today you can apply and be approved for a payday loan or
cash advance fast, in the comfort of your own home.
|
used office furnishings-supplies-equipment-desks-cubicles-service-counters for
sale in Akron Ohio
Die cast model cars for sale in Akron Ohio
used cars for sale in Akron Ohio
unfurnished homes for
rent in Akron Ohio
| first second
ARM compare rates find the best rates current in your area lenders read reviews calculator adjustable rate loan home lenders brokers
quotes florida houston gmac washington interest only 2nd software debt consolidation
reverse senior equity texas maryland options lending bad credit
option one ameriquest chase first banks emc residential california miami dallas est branch marketing
home company commercial yahoo online bad credit low credit no credit |
|
