By: Emma Pilcher
Terms such as ‘balloon mortgage’, ‘foreclosure’, ‘negative equity’ and ‘100% mortgage’ are used all of the time in the property industry and many of us have to put sole trust into a solicitor/mortgage advisor rather than attempting to comprehend the meaning of such jargon.
Mortgages are technically just a loan with the difference being that it is secured on property, instead of a signed piece of paper. When searching for a property, estate agencies are usually the first port of call either on the phone, over the internet or by fax. Many of these firms provide their own mortgage advisors or financial consultants in order to be able to offer their customers with educated advice about the most suitable mortgage based on individual circumstance. Popular Types of Mortgage
There are many different types of mortgages available with something to suit almost all financial situations. Prospective customers looking into buying a property will usually benefit from having a large deposit as this will potentially bring mortgage repayments down as well as offering a better credit rating to the loan companies. Those who have very little in the way of a deposit will likely be referred to a high interest mortgage covering the loan firm if the new owner defaulted at an early stage.Fixed rate mortgages are aptly named as the interest rate for these is fixed over the term of the loan so the debtor (the person who takes out the mortgage) knows exactly what will have to be paid off. Variable rate mortgage costs change every year and can go up or down in price; largely depending on the way the London Interbank Offered Rate moves.Another popular loan type in the UK is an endowment mortgage in which the loan for the property is given but the repayments are done on an interest only basis. A set fee is paid into an endowment policy with the plan that when it matures, it will be able to pay the loan off on the property in full with the possibility that there will be some left over for the debtors to enjoy.
Other Types of Mortgages
Flexible mortgages are ideal for those who are buying a property but who do not want to stick to static payments each month for their agreed term. It offers the facility to take payment holidays for anything up to 12 months or do the complete opposite and pay more than what the monthly sum has been set up for.
Another way of getting money back on a property without selling it through an estate agent is to release some of the equity in a property. An equity loan is similar to a second mortgage where once the property is worth more than what is owed on it; a loan can be taken out on that part of the house. This is often the case when the debtor wants to add an extension, refurbish a room or needs to free up some cash for personal reasons.
There are many types of mortgages available and the majority offers something suitable for most individual circumstances. It takes time to search for the best loan to suit tailored needs and expert advice is usually the best way forward. It is vital to get the most suitable deal as mortgages on average run for a period of 25 years plus and such an important financial burden must be the best one for you.
0 comment:
Post a Comment