Welcome to 1 Step Home Mortgage
Best Home Mortgage Interest Rate Article
This is a selection made from among articles on Best Home Mortgage Interest Rate. For a permanent link to this article, or to bookmark it for future reading, click here.
Home Mortgage Loans
from: Matthew BourneGetting rid of the mortgage early is something that many home owners in the UK aspire to achieve. Being free of the principal financial debt in most people's lives at the earliest stage possible offers financial security and peace of mind for later on in life. Paying off the mortgage early is no pipe dream though. In 2003, the average age of outright home ownership was 56, by 2004 the average age had fallen dramatically to just 48!
How home owners pay off their mortgages early
The secret to paying your mortgage off early lies in choosing the right type of home loan, and this is where flexible mortgage loans and offset mortgage loans step in.
Flexible mortgage loans, as their name suggests, offer flexible mortgage repayment terms where overpayment of mortgage is allowed by the home owner without incurring a penalty. Some flexible mortgage loans allow overpayment of a limited amount, such as 10% of the mortgage value, while other flexible home mortgage loans cater for unlimited overpayment by the home owner.
The advantage of flexible home mortgage loans is that as well as allowing you to overpay, you can also underpay, so taking a 'payment holiday' if finances become a little thin. Underpayment is of course subject to the terms of the mortgage, and will normally only be allowed if it amounts to less than the funds that have been overpaid.
Overpayment via flexible home mortgage loans means that you get to reduce your mortgage capital as well as pay off interest accrued on the capital each month. For each successive month that you make an overpayment the amount of interest paid on the overall mortgage is therefore reduced. An overpayment of just £65 on an £80,000 mortgage with the interest rate at 6.0%, will see mortgage loans paid off 5 years early, amounting to a total saving of some £15,000.
Offset home mortgage loans
Offset home mortgage loans were unveiled to the home owner in 1998, and have gained a great deal of respect from home owners since that time. Offset mortgage loans help to pay off a mortgage early by using what is known as a 'sweeper' system. Providing that the home owner has their current and/or savings account with the mortgage loans provider, their available balance is 'swept' across to their mortgage account each day to offset/reduce the amount of mortgage capital subjected to interest.
To illustrate the advantages of offset mortgage loans, take a mortgage of £100,000 and a balance of £10,000 in your current account and/or savings account. Instead of the interest rate being applied to the £100,000 every day or every month, the interest rate would be applied to your mortgage balance less the balance in your current account / savings account. This means that interest would only be applied to £90,000 of your mortgage, effectively making 10% of your mortgage interest-free!
About the Author
Matthew Bourne has been working in the loans, mortgage and life insurance industry for over 10yrs and is currently working for http://www.loansgalaxy.com/secured-loans/uk/home/
Best Home Mortgage Interest Rate News
As Interest Rates Drop, Interest in Refinancing Jumps (WFMY News 2 Greensboro)
Mortgage consultants say a growing number of people want to take advantage of lower interest rates.
Read more...Mortgage rationing gets tougher (BBC News)
Mortgage lenders are continuing to demand larger deposits as they ration home loans to their customers.
Read more...You must be logged in to rate this story. (WBOC Salisbury)
SEAFORD , Del. - Mortgage rates are at a 37-year low and many homeowners are taking advantage of the dip in interest rates to refinance. Lenders say December was their best month in six months.
Read more...You'll need a 40% deposit, mortgage-hunters are warned (Daily Mail)
A quarter of mortgage deals are available only to borrowers with a 40 per cent deposit, it has been revealed.
Read more...New Year's Resolutions: Fix Your Finances (PC World via Yahoo! News)
If your New Year's resolutions concern improved money management, you're in luck: This past year saw the introduction of several new Web-based personal-finance sites and useful upgrades to older ones. Almost all are free, supported by marketing tie-ins to various offers that might help in your endeavors--a credit card with a lower interest rate, for example, or a favorable mortgage refinance.
Read more...Foreclosures well below national average in East Texas (KTBS Shreveport)
Home foreclosures have hit all-time highs around the country -- but not in parts of East Texas. Gaylene Swanson with Texas Bank and Trust said the East Texas area is not experiencing the housing crisis like other areas. For people having a tough time paying their mortgage, Swanson is surprised more homeowners are not taking advantage of the low interest rates -- below 5 percent for those with ...
Read more...Record low interest rates on cards (Express and Star)
Fresh gloom was predicted for millions of pensioners and savers this week with interest rates set to hit a record low as the Bank of England grapples with a deepening recession. The Bank’s official rate has never fallen below the current two per cent in … [visit site to read more]
Read more...