Mortgage
Spotlight - Finding the Best Flexible Mortgage UK Deal
The
best flexible
mortgage UK is the one that works with the needs of
the individual borrower. Flexible mortgages are home loans
that allow some deviation from their repayment schedule
and allow underpayments, overpayments, repayment holidays
and interest charged on a frequent basis. This review will
look at each aspect of a flexible mortgage and highlight
what makes the best flexible mortgage deal in the UK.
Overpayments
The
vast majority of flexible
mortgage borrowers make overpayments on their mortgages.
The earlier that you make the extra payments in your mortgage
term, the earlier your mortgage will be paid off. Even by
making slightly higher monthly repayments it will enable
you to repay your mortgage loan quicker. For example, on
a £70,000 mortgage charged at 6.2%, giving up your
weekly coffee at £2.80 and putting that money towards
your mortgage instead, would pay off the mortgage 1 year
and 5 months early!
Some
flexible mortgage
lenders state a minimum overpayment of £25 per
month and a maximum overpayment of 10% of the outstanding
balance on completion. Overpayments can also be made by
lump sum payments on an ad hoc basis. The best flexible
mortgage UK is one that allows you to overpay at any time
without penalty.
Underpayments
Underpayments
can occur when you have made some overpayments. The underpayment
option of a flexible mortgage is useful if, for example,
your finances have become stretched. You can then choose
to underpay for a few months until your finances have settled
down. The best flexible mortgage UK deal allows underpayments
straight away.
Payment
Holiday
Some
flexible mortgage deals allow you to take a complete break
from making mortgage payments for up to a year. This could
be useful if you’re thinking of starting a family
or taking a sabbatical. You have to have built up sufficient
overpayments to cover the period you take off and some mortgage
lenders may only let you take a couple of month’s
payment holiday each year. The best
flexible mortgage UK deal allows you to have payment
holidays for up to a year.
Borrowing
Back
Borrowing
back overpayments, instead of taking out a loan, makes sense
if you need extra cash for any reason. You often have to
build up a reserve of overpayments against which you can
borrow and there will probably be a ceiling on the overall
amount you can borrow through your original mortgage. The
great aspect of mortgage overpayments is that rather than
putting any spare cash into a saving account and earning
a small rate of interest, the amount you overpay is taken
off your mortgage so you are effectively earning the mortgage
rate on your savings. Some flexible
mortgage lenders let you withdraw overpaid money directly
using a cheque book or a debit card and others let you borrow
money as the value of your property increases. The
best flexible mortgage UK deal allows easy access to funds.
Interest
Charges
Unlike
some traditional
mortgages that still charge mortgage interest on an
annual basis, flexible mortgages are calculated on a monthly
or daily basis. This means that any overpayments you make
are quickly credited against your loan, so you are immediately
paying interest on a smaller amount of debt, thereby saving
you money in interest charges. The best flexible mortgage
UK deal calculates interest on a daily basis.
Final
Thought
The
modern mortgage market has become more liberal and creative,
and therefore this has led to an increase in the choice
and range of flexible mortgage packages being offered to
borrowers. Due to so many flexible mortgages to choose from,
we recommend comparing a variety of them to ensure you get
your best flexible mortgage UK deal for your needs.
GET
A NO-OBLIGATION FLEXIBLE MORTGAGE QUOTE COMPARISON HERE
Article
Source: www.articlesbase.com/mortgage-articles/finding-the-best-flexible-mortgage-uk-deal-287536.html
About
the Author:
D Kemble wrote the article 'Finding The Best Flexible Mortgage
UK Deal' and recommends you visit The Offset Mortgage Centre
for more information on best flexible mortgages in the UK.
|
