Home    |    About Us    |    Contact Us    |   Privacy Policy  

 
 

 
Below, you'll find extensive information on leading gmac mortgage articles and products to help you on your way to success.

The Types Of Mortgage
By Kate Tee-11606
Fixed rate mortgage


As the name suggests, these offer the stability and reassurance of a fixed rate of interest, generally for the first two to five years of the term. A fixed rate should help with your budgeting during the early years of your commitment, especially if your budget is tight. The risk  of course  is that market interest rates actually fall during this period, when youre still committed to paying your at the higher rate. Normally, the fixed rate converts to a standard variable rate after between two and five years.

Variable rate mortgage

This is the 'standard' type of and as such attracts the lenders standard variable rate of interest (SVR). The SVR will rise and fall according to fluctuations in the market. If the Bank of England chooses to raise the base rate of interest, your SVR is also likely to go up  and vice versa. In other words, your will become more or less expensive, depending on fluctuations in the market.

Discount rate mortgage

Here, the rate of interest on your is offered at a discounted rate for a fixed period. The discount relates to the lenders prevailing SVR  so if you are offered a 1% discount, for example, and the SVR is 6%, you pay only 5%. If the SVR falls to 5%, youd pay 4%. During this period your repayments will rise or fall according to the market, and will continue to do so at the end of the discount period, when your reverts to the standard variable rate.

Cashback mortgage

A cashback provides a lump sum back to the borrower when you take the out. This can be either a fixed sum or a percentage of the total that has been borrowed (usually, between three and six per cent). The disadvantages are the relatively higher monthly repayments, and the fact that if the borrower decides to repay the whole of the within a given number of years (say, three to five years), then the cashback also has to be repaid.

Flexible mortgage

Flexible mortgages would suit borrowers who expect intermittent changes in their financial circumstances  the self-employed, for example  who can sometimes afford to make overpayments but might equally need to pay less and take a 'repayment holiday' (provided a 'reserve' of overpayments

has been built up initially). Most set interest rates on a daily or monthly basis to encourage overpayments, which in turn will reduce the life of the and thus achieve savings. Cheque books are often provided and allow the drawing down of an agreed additional advance. Flexibility comes at a price however, and you would expect to pay a higher rate of interest on a flexible mortgage.

Capped rate mortgage

A capped rate combines the benefits of both the fixed rate and discount rate mortgage. A maximum rate of interest is guaranteed for a given period of time. If the SVR falls below that rate, however, you pay the lower rate. So your interest rate may vary, but will not exceed the agreed 'cap'. Some capped mortgages have not just this upper limit but also a lower limit, below which the rate payable may not fall. Such mortgages are known as 'cap and collar' mortgages.

Current account mortgage

Combing your current account with your results in a very large overdraft, and keeps almost all of your finances in the one place. The advantage lies in being able to use any funds in your current account to set against the outstanding in your 'overdraft'. If your is for £200,000, for example, but you had a £4,000 surplus in your current account, you would only pay interest on the net balance of £196,000 and could therefore pay off the more quickly. You might consider it unhelpful, however, to be locked into such an arrangement for all your banking needs and the flexibility of the comes at the price of a generally higher rate of interest. To get full value from the extra youll be paying in higher interest therefore a current account is only likely to benefit you if you maintain a consistently positive and sizeable current account balance.

Offset mortgage

Rather similar to a current account mortgage, an offset also allows you to use any credit balances and savings to offset  or set against  your debt. In this case however, the accounts can be maintained separately. Once again, the higher rate of interest at which any offset is likely to be offered means that you are only likely to benefit from the added flexibility if you already have or can reasonably anticipate significant credit balances and savings.
Find out more about types of mortgage at www.confused.com/mortgages


We strive to provide only quality articles, so if there is a specific topic related to mortgage that you would like us to cover, please contact us at any time.

And again, thank you to those contributing daily to our gmac mortgage resources.

Mortgage Interest Rates Nudge Down A Little
By Dane Smith
Before we talk about what happened with mortgage rates this week lets do a quick recap of what happened last week. Last week mortgage interest rates made a sudden jump over the previous week. For the Read more...

Some Basic Information About Second Mortgage
By Paul Coers
A second mortgage is a loan under the first mortgage, with property, the first mortgage of security. A second mortgage, you can borrow the money you need without another property to be insured. Read more...
Resources
Home Mortgage Calculator
Best Fixed Rate Mortgage
Gmac Mortgage
Today Mortgage Rates
More Resources
Canada Mortgage Rates Not Likely To Fall
By Flowers
Mortgage rates in Canada, which have plunged by almost 50 percent in the last year, arenít likely to fall further, said Phil Soper, chief executive officer of Brookfield Real Estate Services Read more...
Improving Financial Conditions With Bad Credit Mortgage Loans
By Christen Scott
Life gets you into good times as well as bad times. Good time you relish a lot but when you have to face bad time it requires you to have a lot of courage. Financial crunch is one of them, if you Read more...
Best Mortgage Rate- Free Helpful Information About Low Mortgage Rates
By deepak kulkarni
It's difficult to provide accurate best mortgage rate information, but we have gone through the rigor of putting together as many best mortgage rates related information as possible. Even if you are Read more...
New Mortgage Approvals Are On The Increase
By Direct Traffic
This week the latest numbers for mortgages was revealed. Positive news for the number of new mortgages being issued as figures rose across the UK. This is of course good news as it shows lenders have Read more...
Mortgage Rate
By ratetake
If you are planning to purchase or refinance a new home, it is ideal to study the past to future forecasts for mortgage rate trends. Before deciding to sign any loan contract you should be sure that Read more...

 

 

© 2019 Petua series on Mortgage . All Rights Reserved | Best Tips, Guidelines and Information from Petua.org