Don't pay more for your mortgage than you have to. There's almost certainly a deal that's much better than the one you have now. It might be time to find out about the latest mortgage deals.
When it comes to your mortgage, you might be happy to hear that re-mortgaging could help you save a lot of money each month. If you've lived in your home for a while, you'll have a lot of equity in it. You could refinance your home to make improvements or add on to it, buy a second home, combine your loans, or just save money.
People are switching mortgages more and more often, so if you're thinking about doing the same, you won't be alone.
If you are on your lender's standard variable rate, switching to a two- or three-year fixed term interest-only loan could save you about 2% on your interest rate. If you have a mortgage of around £100,000, this could save you around £2,000 per year. There are costs, but with the latest mortgages and the number of lenders competing for your business, you should be able to find a fee-free lender who wants to help you keep your costs as low as possible.
There are so many different mortgages out there that we couldn't even begin to list them all. In addition to saving money, you may find that there is a mortgage that fits your needs better than the one you are on now.
Homebuyers who don't want to take any risks might be more interested in traditional mortgages. This kind of mortgage makes sure that the debt will be paid off in full by a certain date, as long as payments are made.
Interest-only mortgages are becoming more popular and are good for people who don't mind taking some investment risk in the hopes that they can pay off their loan early or maybe even end up with more money than they borrowed in the first place. Endowment, pension, and ISA (individual savings account) mortgages are three of the most popular interest-only schemes.
With an ISA mortgage, you can invest your ISA allowance (GBP7,000 in 2006). The ISA is made to hold investments like stocks, bonds, unit trusts, and investment trusts. Gains from investments are not taxed. Most ISA mortgages are invested in products that spread your money over a wide range of assets. In the past, shares and funds based on shares have given better returns, so an ISA that invests in shares or funds based on shares is likely to help pay off the mortgage faster than other schemes. After paying off the mortgage, there could be a lump sum bonus that is not taxed. Unfortunately, there is no built-in life insurance, and there is always a chance that the income from the investments won't be enough. Some borrowers can be very worried when the stock market is volatile and shares go up one day and down the next.
There are other mortgages that don't charge interest, such as:
Endowments, which give the hope of a tax-free value at the end of the term that is more than the mortgage debt and has some built-in life insurance.
A pension mortgage gives you tax breaks on the money you put in, a lump sum that isn't taxed, and the chance of a high maturity value.
Then there are flexible mortgages, which allow you to change your monthly payments and make them bigger when you can. There's also the chance of getting all the credit you need.
How do you choose the right mortgage when there are so many options? Here, some help would be very helpful. An online broker will know everything there is to know about the market and will give you all the help you need, searching the entire market to find you the best deal.
Your new loan could be a lot better than the one you have now.
