In recent times, Independent Financial Advisors (IFAs) have been used by many people as an alternative to mortgage brokers. The main reason for this is that there is a crossover between the services they offer.IFAs and mortgage brokers usually receive their qualifications from the same few training institutions. These institutions include the IFS School of Finance and the Chartered Insurance Institute (CII). When a person receives their...more
Equity release is a way for homeowners to release cash from the equity that has built up in their home. Equity can be defined as the difference between the value of a property and the balance of the mortgage, or any other finance, that is secured on it.There are several different methods of equity release available to homeowners. This can include releasing all or part of the equity they have built up in their properties either as a lump sum, a...more
There are several different types of methods for interest to be charged on mortgages. Tracker mortgages have a variable interest rate that moves roughly in line with the Bank of England Base Rate (BoEBR). Another popular type of interest rate is a fixed rate which does not move in line with the base rate.The interest rates on tracker rate mortgages are quoted as a fixed percentage above the base rate and will normally exist for a short period, although it can be attached to the tracker rate mortgage for its entire term. The opposite of a tracker rate mortgage is a fixed rate mortgage. The interest rate on this type of product does not move in line with an index and instead remains stagnant for a fixed period of time.Once the tracker period expires the interest rate will convert to the lender's Standard Variable Rate (SVR). A typical example would be a tracker rate mortgage that has an interest rate of BoEBR+2% for three years. Once the three period expires the interest rate will revert to the lender's SVR for the remainder of the term of the home loan.The BoEBR is set by the Bank of England Monetary Policy Committee (MPC) each month. The MPC will evaluate a range of economic...more
A capped rate mortgage has an interest rate that cannot rise above a pre-determined level for a specified period of time. After the capped rate period expires, the interest rate of the mortgage reverts to the lender's Standard Variable Rate (SVR).A cap and collar mortgage is similar to a capped rate mortgage except that is also has a lower limit,...more
Fixed rate mortgages offer borrowers the ability to help budget for household expenses more accurately because they have an interest rate that remains constant for an agreed portion of the overall term of the mortgage - typically between one and five years.Unlike variable rate mortgages, the interest rate charged on fixed rate mortgages will not be...more
When applying for mortgages borrowers have the choice of obtaining interest only or repayment mortgages. Interest only mortgages require the borrower to only pay the interest charged each month on the mortgage. The balance of the mortgage remains the same throughout the entire term of the loan.With repayment mortgages, the monthly payments to the lender comprise an element of interest charged and an element of capital repayment. As long as all the repayments are made on time, repayment mortgages are guaranteed to be repaid at the end of the term. Repayment mortgages are also known as "capital and interest mortgages" because the capital balance is repaid along with the interest payments.During the term of repayment mortgages the monthly payments made to the lender comprise both an interest portion and a capital repayment portion. At the beginning of the term of the mortgage the interest portion is high and the capital portion low. Over time the interest portion diminishes and the amount of capital repaid increases. At the end of the term of repayment mortgages, the capital portion should be fully repaid.Repayment mortgages are less risky than interest only mortgages because there...more
Mortgage advisers are divided in their opinions as to who are the real winners and losers out of the recent interest rate rises. No one could argue that borrowers who have variable rate mortgages have lost out because their monthly repayments have...more
If you are looking to buy a property, or remortgage property you already own, you will have the option of searching for a mortgage product by yourself or employing the services of and independent mortgage adviser.There are various factors that you...more
In the wake of increasing interest rates, interest only mortgage products have become an increasingly popular tool for home owners to control their monthly expenses. Applications of this type of home loan generally rise in number when interest rates...more
Flexible mortgages were first introduced into the UK to cater for individuals with intermittent working patterns. Flexible mortgages are a recent addition to the home loan market in the UK, although they have been popular overseas for several...more
With so much interest rate uncertainty in the market borrowers are facing a dilemma as to whether they should fix their home loan interest rate or not by applying for a fixed rate mortgage. A fixed rate mortgage will provide absolute security against...more
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