Studies have shown that an amazing amount of homeowners in the UK have been paying much more than they should for the mortgage on their home. Figures show that up to 25% of home owners are losing money in this way.
If you are one of these people then you might have been thinking of remortgaging. In many cases you could save a lot of money and also have capital to play with!
Remortgaging can help to improve your lifestyle – with no additional cost – instead of getting a loan for a car you could remortgage your house at a better rate, and buy the car!
Current Account Mortgages
Current account mortgages put all your cash into one single place – your mortgage and loans, savings and current account.
The enables you to reduce the total cost of your mortgage.
Your account balance will reduce the interest on what you owe on your mortgage, potentially saving you thousands of pounds!
Many people are using this method to let them pay their mortgage off early.
Cash remaining in your current account goes towards paying off your mortgage each month. Even by paying an extra 100 a month on a 70,000 mortgage, you could reduce your mortgage by seven years!
A current account mortgage is a great way to make your extra money work for you – and you don’t pay tax on the savings in your account!
First Time Buyer Mortgages
Normally first time buyer mortgages are divided into two separate areas:
Standard mortgages with incentives for FTBs (first time buyers) and 100% mortgages.
Remember the bigger the deposit you give, the better rate you will get. 100% mortgages often come with more expensive rates, extra fees as well as higher mortgage indemnity guarantees – not something you really want as a first time buyer.
Repayment mortgages, or capital repayment mortgages, are where one make monthly payments which contribute tp the entire sum lent as well as any outstanding interest.
Repayment mortgages are paid back during a set period. As long as you you continue to pay your monthly contributions in total, it is guaranteed that whole mortgage is paid in full at the conclusion of the agreed term.
In the first few years of the mortgage, most of each monthly payment pays off interest owed. The sum paid off every year goes up as the mortgage term goes on.
Interest only mortgages
Interest only mortgages are loans where the party lending the money agrees to only charge interest throughout the mortgage term.
The capital amount gets repaid at the end of the agreed period.
Usually a lender asks you to establish a repayment schedule for the loan at the beginning although this is occasionally not the case. So every month you make two different payments, one to your lender and one to the investment you have chosen to repay the mortgage.