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Home > Finance > Mortgage


mortgageDeciding to move home usually means lots of planning and preparation. Looking for the perfect mortgage can be as tricky as chosing the perfect house. However when using HomesOnSale deciding to get a mortgage has never been easier. From one form you can compare over 7000 mortgages, and in some cases apply direct. You will see the best offers available to UK residents.

There are two main types of mortgage. These are repayment mortgages and interest- only mortgages . The savings made can differ substantially between the different types of mortgages and between the different lenders.

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Repayment Mortgage: The payments made to the lender every month pays off both the capital and the interest from the mortgage. Regular payment guarantees to pay off for the loan by the end of the term agreed (usually between 20 and 30 years). You usually pay off more interest at the start of the mortgage term and then gradually more of the capital debt. Therefore, in later years, you will be repaying increasing amounts of capital and reducing amounts of interest. It looks a bit costly as compared to the other types of mortgages because the monthly installment pays off the capital and not just the interest. Most lenders also offer Flexible mortgages and 100% mortgages .

Flexible Mortgage: A flexible mortgage has the facility for both over-payments and under-payments built into the mortgage. This enables in overpaying mortgage when finances allow, and then, provided that overpayments is made in the past, underpayment can be done when finances are tight. Flexible Mortgage helps in paying off mortgage early and save a lot of money in interest. Interest is calculated regularly so as the capital owed to the lender gradually decreases, interest payments also decrease.

100% Mortgage: The 100 % mortgage option enables to buy the property outright. This usually means a higher interest rate. With a 100% mortgage you are more likely to get tied into the property, which is bad unless house prices rise rather than fall. Fall in house prices gets negative equity, which means the mortgage will be of larger value than the sale value of the property. 100% mortgage may likely require payment of mortgage indemnity guarantee, though most lenders allow it to be added to mortgage to improve cash flow. On the positive side a 100% mortgage is the best option if a deposit on property is not affordable. A quote to select the best available option is free and there is no obligation to finish the deal.

Interest-Only Mortgages: An interest-only mortgage is where the lender only charges interest on the mortgage agreed. The capital is not paid back until the end of the mortgage term (whatever period agreed). The idea of this mortgage is to pay the interest owed to the lender and save the capital repayments by investing them elsewhere. At the end of the mortgage term you make enough money from investments to pay the lump capital sum. This way helps in possible saving by investing capital that would otherwise be paid straight back to the mortgage lender.

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