If you get a fixed salary every month, it's easy to pay back a loan in fixed monthly payments. If your income changes, though, it might be harder. Flexible mortgages have come about to take advantage of the potential of the second group, which is mostly made up of self-employed people and people whose income comes mostly from commissions.
Because their income changes all the time, these people can't get regular mortgages for two reasons. First, lenders don't like borrowers whose income changes a lot. Second, a borrower with this kind of income structure would find it hard to make payments on time.
Some of the things that make flexible mortgages in the UK stand out are that you can make payments whenever you want and that you can pay off the whole loan whenever you want.
Before you think this is the best kind of freedom, we'd like to remind you that not all good things are free. This is true in the case of mortgages that can be changed. The interest rate on flexible mortgages is higher than the interest rate on regular mortgages.
Even though the interest rate on flexible mortgages has gone up in the UK, they are still very popular. People who work for themselves will keep using flexible mortgage until there is something better. The pros of flexible mortgages have become more important than the cons.
One of the best things about flexible mortgages is that you can change how much you pay each month. In traditional mortgages, the borrower has to pay a fixed amount every month. Flexible mortgages, on the other hand, are easier to pay back. So, in a month when there aren't enough funds or when the borrower can't make payments at the usual rate because of a loss, the borrower will have to pay less. In the same way, the borrower can make an overpayment if he can pay more than what is required. Paying less also means paying nothing. It's hard to believe, but this is true. One of the best things about flexible mortgages is that you can take a break from making payments. During a payment holiday, the borrower doesn't have to pay anything at all. The exemptions will depend on how reliable the borrower has been in the past months and how much of the loan has already been paid off.
Next on the list of benefits is the ability to use the amount paid as many times as you want. So, a flexible mortgage can be found at www.easymortgageuk.co.uk/flexible mortgage.html. Flexible mortgages have a feature that lets borrowers take money out of the money they've already paid. Again, this means that the borrower must have made enough payments before this facility can be used. This gives the borrowers a steady source of money, but it also makes the mortgage last longer and increases the amount of interest they have to pay.
Since the amount still owed changes all the time, charging interest once a year or once a month would be more expensive for the borrower. The third benefit of a flexible mortgage has to do with a clever way to lower the amount of interest you have to pay. The interest on mortgages that are flexible is calculated every day. Interest is calculated every day to make sure that interest isn't lost during times when the amount owed is less because of overpayments.
This is not the end of the list of benefits. Flexible mortgages offer the option to settle accounts early. Unless it says otherwise, mortgagees will charge a penalty for paying off the loan early. With a flexible mortgage, on the other hand, the borrower is free to pay off the loan before it is due and not be charged any fees. This clause will help a borrower who wants to get out of paying the high interest rate. A loan taken out to cover a temporary lack of money will be paid back as soon as the borrower gets the money to do so.
Flexible mortgages will be given to borrowers based on how good their credit is. The process for getting a flexible mortgage is a lot like getting a regular loan or mortgage. Online applications and online processing make it faster for flexible mortgages to be approved.
