What Are Flexible Mortgages?
Hot Topics
- What is a Mortgage in Principle?
- A Mortgage in Principle is a conditional offer made by a mortgage lender to verify that they will ‘in principle’ give you the mortgage loan you have discussed with them.
- Will I Have To Pay An Arrangement Fee And How Much Will It Be?
- The Arrangement Fee is also known as an Administration or Application fee and it’s designed to cover your lender's administrative costs for setting up the mortgage.
- How Is Interest Calculated On a Mortgage?
- Interest is charged in different ways depending on what kind of mortgage you have.
- Where Can I Buy a Mortgage?
- Many, but not all financial services companies offer mortgages. If you are looking for a mortgage the traditional approach is to speak to you bank or a building society. However, you are most likely to find the cheapest deals by speaking to a Mortgage Broker.
- What Are Buy To Let Mortgages?
- A buy to let mortgage is an excellent opportunity to cash in on the property boom at the moment – because while many homeowners can afford a 2nd home, there’s also a booming market for those who cannot afford to get a mortgage, and need to rent. Find yourself a good location and reliable tenants and your monthly repayments on your mortgage will be covered by their rental yield.
Generally, people rebroke their mortgage deal once every five or six years. They also may change their mortgage lender at the end of a discounted or fixed period. Chances are in that in the time between their last remortgage, the mortgage market will have changed a great deal.
Today’s mortgage market is also a great deal more competitive than ever before. Remortgaging is in vogue because borrowers have begun to realise that they could change their lender if they wanted to. This has allowed a ‘Bargin hunter’ mentality within the uk mortgage market with borrowers looking for the ‘best offer’ at every opportunity. In recent years many new types of mortgage and many new variations on existing types have released in to the market place the most prominent addition in recent years to the mortgage market was the flexible mortgage.
What makes a mortgage a ‘flexible’ mortgage, with so many products available how do can you recognise a flexible mortgage?
Overpaying
The defining benefit of a flexible mortgage is the ability to overpay your loan back faster than the normal repayments would allow. This benefit can save you a lot of money as you can reduce your interest charges on the loan. You should be allowed to overpay at any time, and any amount, and by lump sum or regularly. This helps to reduce the total interest owing, and you can pay the loan off early.
Interest Charges
On a flexible mortgage, interest should be calculated daily. This will allow you to get the maximum overpayment benefit immediately rather than having to wait for a for the interest to be calculated annually.
Underpaying
A truly flexible mortgage will allow you to underpay if you need to, usually this benefit is only allowed after you have overpaid enough to cover the difference between your normal payment and your underpayment.
Payment Holidays
You should be able to take a payment holiday, maybe for a couple of months or over Christmas. usually this benefit is only allowed after you have overpaid enough to cover the difference between your normal payment and your underpayment.
No Redemption fees
A flexible mortgages should not have redemption fees at any time, so you are free to pay off large chunks of your mortgage or move on without penalty.
Reborrowing
Finally, you should be able to borrow back money that you have overpaid should you need to.
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