Mortgage and Refinancing Information Channel:

We would like to thank the local libraries, schools, and universities for recommending students to visit us when doing research on any of our information topics.
 Please check back frequently as new topics are added and current topics are updated daily.

What is a Repayment Mortgage?

A repayment mortgage is the type of mortgage that most people think about. The idea behind a repayment mortgage is that you pay monthly for a set period and each payment consists of an element of capital and interest.

A repayment mortgage is one for which each monthly payment contributes to the capital and the interest that is to be repaid over the term of the mortgage. Assuming that the contractual payment is made each month for the full term of the mortgage, at the end of the term the mortgage will be fully repaid.

With a repayment mortgage your monthly payments consist of both the capital amount borrowed together with accrued interest. Your lender will keep you advised about how much you have repaid.

Initially, most of your monthly payment pays off the interest and what's left goes towards reducing what you've actually borrowed. As time goes on, the 'balance' changes and as the interest charges reduce, more and more of your monthly repayment is used to reduce the loan.

A repayment mortgage is a mortgage contract under which the customer is obliged to make payments of interest and capital which are designed to repay the mortgage over the stated term. As long as you keep up the payments, the whole loan will be paid off over the term of the loan. Many people opt for a repayment mortgage on for this very reason - a repayment mortgage is the safest option as it means that you will have that guarantee.

With a repayment mortgages the entire mortgage is paid back over an agreed period of time. This is referred to as the mortgage's term and is usually set at 25 years. When the mortgage's term has come to an end, providing all the repayments have been met, the property will be in the hands of the homeowner.

A repayment mortgage means that each month you make a payment to your lender which consists of both a repayment of part of the loan and a payment of the interest on your loan.

You are reducing your debt every month, and as a safeguard you will need to arrange life assurance, which is often a compulsory requirement with mortgage lenders so that should you die before the end of the term your mortgage will be paid off.

Deciding which mortgage is best for you depends on a few factors, which is why it's important for you to do your financial homework first. Repayment mortgages are regarded as the safest option, hence their appeal to the more cautious investor. They are certainly much easier to understand and you should have no trouble working out your monthly incomings and outgoings.

You may freely reprint this article provided the author's biography remains intact:

About The Author

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

MORE RESOURCES

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

RELATED MORTGAGE AND REFINANCING ARTICLES: Reaping Financial Rewards - Bad Credit Home Equity Loans Home is the place you inhabit. It is the place where you live, breathe, grow, thrive. Repayment of Loans - Lessening the Bitterness of the Process So how have you planned the repayment? Don't tell if you haven't started the plannings yet. It is high time the plannings and the decisions be made regarding the repayment of the loan. Avoiding Foreclosure Scams If your mortgage company is threatening foreclosure, there are things you can do to avoid it (see my article titled "How to Avoid Foreclosure"). However, you should be aware of scams. Top 5 Methods to Manage Your Home Equity As your home appreciates in value, you gain equity. You can look at this equity, as a portion of the value of your home, which becomes an asset that is not burdened by debt. Flexible Mortgages - Offering Relief from the Fixed Mortgage A pension mortgage may seem lucrative at the first sight. However, they seldom are, if the customers who took pension mortgage are to be believed. Getting The Best Home Equity Loan Owing to the popularity of home equity loans, there are numerous lending agencies offering a variety of mortgage products. A bad choice of mortgage can lead to disastrous effects, as there is a risk involved of foreclosure and losing one's home. A Guide to Getting a Home Improvement Loan If you've got a few things around the house that you'd like to spruce up but don't have the money for, you might want to consider getting a home improvement loan. As the name implies, a home improvement loan is designed to pay for improvements to a house or other form of real estate. Refinance Your Home Equity Loan Refinancing your home equity loan is an excellent way to save money. By refinancing your home equity loan you can lower your interest rate and finance for a longer or shorter term. Refinancing Your House - How to Know Whether to Refinance or get a Second Mortgage Refinancing your house's mortgage is not the same thing as getting a second mortgage. While both allow you to cash out your home's equity, terms and rates differ between the two types of loans. Home Equity - Let the Market Eliminate Your Private Mortgage Insurance In decades past, most people who were interested in obtaining a home loan were required to put down at least 20% of the purchase price. Those days are gone, and as home prices have risen faster than incomes, the average down payment required by lenders has dropped. Home Equity Loans Popular Scams Most borrowers fail to realize that when trading their much beloved home for cash, lenders can foreclose on their property in the case of default. Moreover, because of fly-by-night operators who are ready to strip unsuspecting borrowers of their most prized asset, it is doubly necessary that borrowers be familiar with some frauds that could be perpetrated on them. Buying a House? How Much Home Can You Afford? Maybe you've heard the expert advice that your debt to income ratio shouldn't be more than 36 percent of your total income. But do you truly know what that means, and how lenders will look at your financial history in order to decide whether or not to extend you a mortgage? If you need help figuring out your debt to income ratio, simply follow the guidelines below and soon you'll know whether or not you're in a position to apply for a mortgage loan. Bridging Finance Basics Bridging finance is a short-term loan that is used as a way to provide funding for the purchase of a new property while the borrower awaits the sale of an existing property. Unless all the stars are in perfect alignment, it's tricky to coordinate the sale of one property and the purchase of another property so that the transactions occur simultaneously. 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. Mortgage After Bankruptcy Most people probably assume that obtaining a mortgage to purchase a home, refinance or to consolidate debt after a bankruptcy is out of the question. In fact, many people are able to obtain these mortgage services, even 1 day after a bankruptcy discharge in some cases. Mortgage Information for the First Time Homebuyer Inflation in the United States is increasing rapidly and home prices are soaring! There are millions of american families that are unaware of the many mortgage programs that are available for first time homebuyers. There are many types of mortgage finance programs available to first time homebuyers. What Your Mortgage Lender Is Not Telling You About Accelerated Mortgages For years, mainstream banks and financial advisors have been recommending that you pay extra cash into your mortgage account in order to cut down the huge interest amount and reduce the period over which you pay back the loan. For example, if you borrow $200,000 over 30 years at a rate of 5%, your monthly repayments would be around $1074. A Guide to Finding Cheap Homeowner Loans If you're actively looking for cheap homeowner loans, there are several things that you should take into consideration to make sure that you get the best loan for your money.Before taking one of the loans offered to you, you should take the time to understand how cheap homeowner loans work, make sure that you've explored all of your loan options, and shop around for the best loan rate that you're eligible for. Zero Down Mortgage Loans - Is 100% Financing a Good Idea and Can You Get Approved? Are you wondering if you can get approved for a home loan with 100% financing? Are you also wondering if its a good idea to get a mortgage loan with no money down? Here are some points to keep in mind as you apply and consider your different mortgage loan options.To qualify for 100% financing on a purchase mortgage loan, it would be important for you to have a credit score of at least 600 or higher. The Truth About Shopping for Mortgage Rates With so much lender advertising focusing just on rates, you may not be aware of the importance in choosing an experienced, reliable loan professional who can match you with the appropriate loan program. Good loan officers and mortgage brokers may quote today's rate when asked, but they will quickly add they need to know more about you to determine the best program for your individual situation.

HOME | SITE MAP © 2012 - 2023 All Rights Reserved Increase pagerank with HitsSurfer