Andy Silk asked:


If you’re using a mortgage to buy your home but are not sure which one will suit your needs best, read this handy guide to mortgage types in the UK. Taking out a mortgage has never been easier.

Fixed Rate Mortgages - the lender will set the APR (Annual Percentage Rate) for the mortgage over a given period of time, usually 2, 3, 5, or 10 years as an example. The APR for the mortgage may be higher than with a variable rate mortgage but will remain at this ‘fixed mortgage rate’ level, even if the Bank of England raises interest rates during the term of the mortgage agreement. Effectively, you could be said to be gambling that interest rates are going to go up, above the level of your fixed rate mortgage interest rate. If this happens, your mortgage repayments will be less than with a variable rate mortgage.

Variable Rate Mortgages - the lender’s mortgage interest rate may go up or down during the life of the mortgage. This usually happens (though not exclusively) soon after a Bank of England interest rate change. Most people consider that opting for a variable interest rate mortgage is best done when interest rates in general are likely to go down. They can then take advantage of these lower rates when they occur. It’s a bit of a gamble but if they are right, it could really work in their favour.

Tracker Mortgages - have a lot in common with variable interest rate mortgages in that the APR of the mortgage can go up or down over the term. The key difference between a tracker mortgage and a variable interest rate mortgage is that the lender will set a margin of interest to be maintained above the Bank of England base lending rate. So, as the Bank of England, in line with monetary policy, raises or lowers the base lending rate of interest, so the tracker mortgage interest rate will follow. Over the lifetime of the mortgage, it could be said that the borrower will neither be better off nor worse off because of interest rate fluctuations.

Repayment Mortgages - you will be required to pay a proportion of the capital element of the mortgage (how much you originally borrowed) together with a proportion of the interest that will have accrued on the capital element, with each monthly repayment. In recent years, repayment mortgages have become highly popular over the previous favourite - endowment mortgages. This is because, unlike endowment mortgages, as long as you keep up your monthly repayments, you are guaranteed to pay the mortgage off at the end of the agreed term. Monthly repayments may possibly be a little more expensive but many borrowers say that at least, they have peace of mind.

Interest Only Mortgages - very common amongst borrowers who are looking to secure a second property. The reason being, with an interest only mortgage, the borrower will only be required to make monthly repayments based on the interest element of the mortgage. The lender will require the capital element to be repaid at the end of the term of the mortgage. Again, as with variable rate mortgages, this could be regarded as being a little bit of a gamble because the borrower is hoping that the property will be worth at least as much at the end of the term of the mortgage, as it was at the beginning, allowing it to be sold and the capital element of the mortgage to be paid off. Any capital gain on the property (although possibly subject to tax) is yours. It could be argued that experience tells us that property prices rarely go down in the long term, but it can never be guaranteed.

Capped Mortgages - a combination of the fixed rate mortgage and the variable interest rate mortgage. A cap or ceiling is fixed for a set period of time. During this period, if interest rates in general rise, above the capped interest rate, the borrower will not pay anything above the capped level. Correspondingly, if interest rates fall, then the rate of interest charged by the lender, will also fall so it could be argued that the borrower gets the best of both worlds. It could also be said that a capped rate is like having a set of brakes on your mortgage, but beware, the lender is also likely to charge a redemption penalty on this type of mortgage, making it less portable than some of the other options available.

Discounted Rate Mortgages - here, the lender may offer a reduced level of interest to be charged over a set period at the start of the mortgage term. Many first time buyers or people who expect their salaries to rise considerably during the discounted rate period opt for this type of mortgage but it should be noted that the reduced rate period will come to an end and when it does, the monthly mortgage repayments to the lender may rise sharply. The lender may also charge a slightly higher rate of interest compared with other types of mortgage over the rest of the term of the loan in order to recoup the monies that they have foregone during the discounted rate period. There’s no such thing as a free lunch!

Offset Mortgages - an interesting newcomer to the UK mortgage market, although still comparatively rare in terms of choice and availability. The mortgage is linked to the borrower’s current account. Every month, the minimum mortgage repayment is paid to the lender but where there is a surplus of cash in the account after other uses and debts have been paid, this is also paid to the lender. Over the months and years, the borrower can potentially pay off their mortgage much quicker and have accrued much less interest than with other types of mortgage provided that a reasonable surplus is maintained in the current account.

So, to sum up, the UK mortgage market has many types of mortgage; any or all of which may be open to the potential borrower, dependent on their circumstances. If you’re looking to take out a mortgage, remember that whilst your broker will take care of the vast majority of the work on your behalf, it may still take around 3 months to complete as there is an enormous amount of work that goes on behind the scenes with solicitors and searches, valuations etc. At least now you’re armed with all of tehinformation you need on each type of mortgage available to you.

This article is free to distribute however, please ensure that all links remain as in the original.

Rose

Susan D asked:


I have a check from my insurance company for hurricane damage. My mortgage company will not endorse the check until the work is done. I need the money to get the work done. How can I get the mortgage company to endorse the check ?

Danny

Aileene Woul asked:


Mortgage is the most widespread industry that offered to loan
borrowers with real estate as collateral. Mortgage has so many
innovations and opportunities that a loan borrower can exploit
them for their own benefit. You must have heard and read it
elsewhere that mortgage rates are at an all time low. That is
true. With growing competition in the mortgage industry getting
lowest rates for mortgage in UK is not that difficult.
Yes that is true, but how does one find lowest mortgage rates in
UK. Many borrowers are practically clueless the criteria to
decide on whether the mortgage rates are lowest or not. When you
are looking for Lowest mortgage rates
in UK, you will see that there is not any one single rate. There
is a list of rates. And when you go to different loan lenders
for rates, they will give to you several mortgage rates list,
sometimes identical sometimes different. “What is going on”? -
You think in your mind. Is there any thing as lowest mortgage
rates in UK? Yes, there is.
You will come across this message everywhere - ‘go look around
lowest mortgage rates’. Look around how? - nobody tells you
that. It is like standing on the start line not knowing this way
you have to run. Calling loan lenders and asking for lowest
interest will be practically useless. Also calling for lowest
mortgage rates at different days will give you different rates
for mortgage rates are changing everyday.
Who is responsible for getting you lowest rate for your mortgage
in UK? Economy? President? Government? Inflation? Discard all
the high words! It is you and you are one of the most
fundamental factor responsible for finding lowest interest rate
on your mortgage. With mortgage borrowers absolutely flooding
the market place, mortgage lenders are lowering the mortgage
rates to attract more and more customers. How can one attract
customers for mortgage? By offering lowest interest rates.
However, it is not that easy. Every homeowner wants lowest
interest rates for its mortgage in UK. Lowest rates on mortgage
in UK are subject to a borrower’s personal financial condition.
Therefore, different mortgage borrowers will have different
lowest rate for mortgage. One way to figure it out is to apply
for mortgage quotes at different loan lenders. But are these
quotes really consistent keeping in mind the fact that mortgage
rates are continually changing. Most loan lenders will give you
a correct quote for mortgage. A mortgage borrower looking for
lowest rate should use APR to compare rates. APR will enable you
to know true interest rates on mortgage including the interest,
discounts, mortgage insurance and other related fees. This will
enable you to get a true quote without any hidden fee which the
lender might be concealing behind the lowest mortgage rate
claim.
Prequalification is a way of discovering whether for mortgage
will also enable you to know whether you are getting lowest
interest rates or not. A lender will see your present current
income, debt and basic credit history situation in order to
qualify you for a maximum mortgage amount. When you find lowest
interest rate for mortgage in UK, you can lock in your interest
rate. A lock means the lender will lock in the lowest interest
rate and points for a specific period of time that is usually
the time during which the loan application is processed.
Lowest interest rates in UK are possible if you have good credit
history. A good credit history has innumerable benefits in the
loan market. Also lowest interest rates are possible adjustable
rate mortgage. Adjustable interest rate mortgage in UK have
interest rates lower than traditional mortgage. Also loan term
of a mortgage should be lesser. A 15 year mortgage will mean
lower rate of interest than a 30 year mortgage. A shorter loan
term will always save money.
No other single factor has so much effect on your mortgage as
mortgage rates. Getting a mortgage in UK at lowest rates will
mean that you have agreed to all those who asked you to get the
“best mortgage deal”. A little decrease in interest rates would
mean big in terms of savings. There is loads of information
available on internet to know how the market is currently
fairing. Don’t settle for the first mortgage rate you stumble
upon because they seem lowest. Go to different mortgage lenders.
And then decide. Lowest rate for mortgage is not the only factor
to look out while mortgaging for but it certainly is one of the
deciding factors.
So while you are jumping frantically from one site to another in
order to get lowest interest rate, you forget that it will need
some patience and hard work. Like all good things it won’t come
easily. Lowest rates for mortgage in UK won’t be served on a
platter. No way. If you had enjoyed doing homework in school,
looking for lowest interest rate won’t be a problem. Look
around, study research, read and you will find mortgage rates
not only lowest but surpassing your own mortgage rate
arithmetic.
If finding the right loan was easy, Aileen Woul would not have
been writing articles. Read her articles to take advantage of
her expertise for your advantage.He works for mortgage web site
cheapest mortgage uk.To find a cheapest mortgage,adverse credit
mortgage,residential mortgage that best suits your need please
visit
http://www.cheapestmortgageuk.co.uk

Cathy

The House Team Of Mortgage Intellingence asked:


“Wow!” you say to your spouse as you hit the brakes on the car. “Did you see the mortgage rate those guys are advertising?” Your worries are over, you’re thinking. Just lock in a rate like that for the next ten years, and you’ve got it made.

Not so fast. That rate may not be the one for you. Typically, the lowest available rate - and the one that makes the rate sign look great from the street - will be for a variable or adjustable-rate mortgage. That rate has the potential to be like a roller coaster. The posted variable or adjustable rate is the rate you’re getting today. Unless you have an economic ouija board, you won’t be able to predict what kind of ups and downs are ahead of you.

Let’s take a closer look. A lender will offer different rates for different types of mortgages. The rates are determined based on financial risk -to the institution and to you. When a customer is willing to take on the risk, he/she is rewarded with a lower rate. If the lender is taking on the risk (that is, the customer is promised a particular rate… regardless of what happens in the future), the rate is higher. The longer the term, the higher the risk for the financial institution.

So how do you decide? Fixed-rate mortgages, because they require a low risk tolerance, are usually better suited to first-time buyers or those who haven’t owned a home for a very long period. Ask yourself these questions: Do you like or need to know exactly what your payment is going to be over a longer period of time? Do you want to avoid the need to consistently watch rates? Do you have less than 25% down? If you answered “yes” to all, or most of these questions, a more conservative fixed-rate ontario mortgage could be the better choice for you.

A variable or adjustable-rate mortgage is best suited to people who have a flexible budget and can tolerate higher risk. Ask yourself these questions: Do you watch market conditions? Can you handle any sudden rate increases that could increase your payment? Do you have 25% or more equity in your home? If you answered “yes” to all, or most of these questions, a variable or adjustable-rate mortgage might best suit your needs.

Some lenders offer a special promotional rate for the first few months of a variable-rate mortgage, which you should discuss with your mortgage broker. Also discuss what your rate will be based on - prime minus 0.5% or 0.6% or on Bankers’ Acceptances (BAs) plus 1%. The latter being a new kind of adjustable-rate mortgage that has recently been introduced to the marketplace. Most variables or adjustables allow you to exercise an option to “lock in” a fixed rate at any time for the remaining portion of your mortgage term or for a longer term.

If the uncertainty of a floating rate is going to give you sleepless nights, you’re in good company. Many Canadians prefer the certainty of a fixed-rate mortgage. They know exactly how much they will pay over the term of their mortgage, and they can plan accordingly… with no financial surprises. But if rates do drop… and drop… and drop… you are committed to the “promise” that you have made. Your best option - have a mortgage broker help you decide which option best meets your needs.

Deborah

Olivia asked:


My mortgage interest rate is 6.875% and the APR is 7.504% Does the APR of 7.504% sound right if the interest rate is 6.875% ? My mom said that the 2 numbers should be closer together than that. Also, my mortgage banker never even mentioned an APR, and since we are 1st time home buyer’s, we were unaware of it. We only knew about the Interest Rate. Thanks for the help.

Sue

james w asked:


If you provide the mortgage company with all the requested info do they typically follow up on that. Does it vary from company to company or is it a common practice for them to execute the 4506t form. Also, has anyone everheard of first choice mortgage in charlotte? Any thoughts on them?

Derrick

The House Team Of Mortgage Intellingence asked:


For most Canadians, buying a home is the largest financial decision they will make in their lifetime. Yet, consumers across the country are more likely to painstakingly review dozens of investment possibilities for their portfolios than to scrutinize their mortgage choices. The mortgage world - like the investment world - can sometimes be confusing. There is a vast array of choices - open, closed, fixed, floating, long or short amortization, prepayment options, portability… and of course, the rate itself.

Making the right mortgage decision can have a huge financial impact over the long term. Many Canadians have an investment advisor to help them sort through their choices. Now, Canadians are also beginning to turn to mortgage brokers to help them make better mortgage decisions. Canadians are just now catching up with their counterparts south of the border, where mortgage brokers already arrange approximately 70 per cent of mortgages for U.S. properties.

So what is a mortgage broker? The role of a mortgage broker is to understand your mortgage needs, seek out the best options for your situation, and guide you through the lending process. A mortgage broker does not work for any individual institution or lender, but is independent, and has up-to-the-minute loan rates for a wide array of banks and other lending institutions.

There was a time when the banks exercised the view that they “owned” their customers, and mortgage brokers were perceived only as a last resort for home buyers with poor credit history. But times have changed, and home buyers in every bracket are learning they can benefit from the professional advice of a mortgage broker.

A good investment advisor can make you thousands of dollars. But a good mortgage broker will SAVE you thousands of dollars. Whether you are buying a home or renewing a mortgage, consider making a mortgage broker part of your financial plan this year.

Ana

PrimeConcern asked:


Given all the worries about credit in this country, and subprime mortgages, I was curious as to what the entire amount of home mortgage debt is. There are about 110 million households in the country, with 70% of them owned residences. Let’s say there are 75 million owned homes. Not all have mortgages, but if 70 million do, and the average mortgage amount on such homes is $200,000, that comes out to a scary $14 TRILLION of mortgage debt in the USA. If just 2% default, the amount of bad home loans is $280 billion. It could obviously be much higher.

Does anyone know what total mortgage debt is per household and in total? This is a real problem that could damage the economy.

Charlie

kimberbenton asked:


I am 28 in the UK. I haven’t got a mortgage. When I am retired and living probably in private rented accommodation, who pays the rent? Or what about if you haven’t finished paying off your mortgage but have to retire? I’m planning for my future!
I am probably never going to have a mortgage. So how do I cope with the rent?

Jeff

Mike asked:


Let me be specific: I have 130,000$ cash, but am unemployed. I received this money as an inheritance. I intend to buy a house with several floors and tenants. Is a mortgage possible in my case? My intention is to at first keep payments going for the mortgage through the revenue generated by the tenants. This will give me the time to get a new job. Would a bank accept this case despite my being unemployed?

Janet